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REPORT 



OF THE 



SPECIAL TAX COMMISSION 



OF THE 



STATE OF KENTUCKY 



1912-14 



W. O. DAVIS - - . - Chairman 

ELWOOD HAMILTON - - Secretary 

W. B. MOODY W. A. FROST 

L. C. OWINGS 

CARL C. PLEHN, Expert and Adviser. 




FRANKFORT, KY. 

THE STATE JOURNAL CO. 

1914 



m~3i / 






APR 10 19' 



X 

-' 






LETTER OF TRANSMITTAL 

Frankfort, Ky., December, 1913. 

To the Honorable, 

'The General Assembly of the 

Commonwealth of Kentucky. 

Gentlemen: The State Tax Commission appointed in conformity 
with the provisions of House resolution number twenty-four of the 
regular session of the General Assembly of 1912, approved March 
15, 1912, to "investigate revenue and taxation in this State and rec- 
ommend a plan for the revision thereof," begs to submit its report. 

Respectfully, 

W. O. Davis, Chairman, 

Etwood Hamilton, Secretary, 

W. B. Moody, 

W. A. Frost, 

L. C. OwiNGSj 
Cart C. Pt^hn, Expert and Adviser. 



INTRODUCTION 



The resolution creating the Commission. 

House Resolution No. 24, passed by the last General Assembly and 
approved by Governor James B. McCreary, March 15, 1912, pro- 
vided for the appointment of a State Tax Commission. It was to 
be composed of five members, two to be appointed by the Speaker 
of the House from among the members of the House of Representa- 
tives, two by the President of the Senate from among the members 
of the Senate, and one by the Governor from the State at large. 

Appointment of the Commissioners. 

The Speaker of the House, the Hon. Claude B. Terrill, appointed 
as the two members from the House, P. L. Atherton, of Louisville, 
and Elwood Hamilton, of Frankfort. Mr. Atherton subsequently re- 
signed on account of ill health, and L. C. Owings, of Jefferson county, 
was appointed in his place. The President of the Senate appointed 
as the two members from the Senate, W. B. Moody, of Henry county, 
and W. A. Frost, of Graves county, and His Excellency, the Gov- 
ernor, appointed W. O. Davis, of Woodford county, as the member 
from the State. 

Organization and meetings. 

The Commission first met at Frankfort on the 7th day of May, 
1912, and organized by electing W. O. Davis, Chairman, and Elwood 
Hamilton, Secretary. It then immediately began its investigation of 
the system of Revenue and Taxation in Kentucky, as well as the sys- 
tems of other States. It has held sixteen formal meetings and many 
other informal conferences for the purpose of consultation and inter- 
change of views. It also undertook to ascertain the need of tax re- 
form by conferences with citizens from various parts of the State, 
representing various industries. Two of its members attended the 
National Tax Conference, which convened at Des Moines, Iowa, Sep- 
tember 3 to 6, 1912, for the purpose of securing information from the 
Tax Commissioners and Tax Officials of other States relative to the 
workings of their tax laws, and also for the purpose of securing a 
tax expert to assist them in their labors, as they were authorized and 



6 REPORT OF THE SPECIAL TAX COMMISSION. 

directed to do in the resolution creating this Commission. Members 
of the Commission, also, visited other States and conferred with the 
Commissioners thereof. 

The appointment of expert. 

After a careful and thorough search, the Commission secured the 
services of Prof. Carl C. Plehn, of Berkeley, California, as its Tax 
Expert. Prof. Plehn is Professor of Finance and Statistics in the 
University of California and was the expert of the California Tax 
Commission in 1906, which reformed the tax system of that State. 
He has since that time been retained as Advisor of the Tax Board 
under the employment of the State government. The Commission 
feels that it was especially fortunate in securing and having the as- 
sistance and counsel, in their labors, of one so well equipped, by reason 
of his exhaustive researches and ripe experience in the field of taxa- 
tion, as Prof. Plehn. 

The work of the expert. 

His labo'.s, since his employment, have been most thorough and 
intelligent. He first familiarized himself with our tax system, and 
the defects of its administration, by investigations conducted in va- 
rious ways and places. He gathered a large amount of data from a 
number of counties and from the records and files in the Auditor's 
office, all of which required arduous and painstaking labors. A large 
part of the data and statistics gathered by him will be found in the 
report. Much more data than are here presented were collected. That 
is to say, Professor Plehn collected data as to the possibility or impos- 
sibility of many different lines of reform, and when the results were 
negative, showing that any given line was impossible or inadvisable, 
the data relating thereto were cast aside. Only those things which 
seemed to be of positive constructive value were retained, and are 
printed here. On August 1, Prof. Plehn, at the request of the Com- 
mission, made to it a preliminary report, embodying his findings and 
recommendations regarding the tax system in Kentucky. This was 
an able and exhaustive resume of existing conditions, together with 
suggested remedies, all of which, after careful consideration by the 
Commission, have been elaborated in this report. 

The constitutional amendment. 

At the November election the proposed amendment to Section 171 
of the Constitution, permitting the classification of property for taxa- 



REPORT OF THE SPECIAL TAX COMMISSION. 7 

tion, and exempting the bonds of the State, counties, municipalities, 
school and other taxing districts from taxation, was submitted to the 
people. It was carried by a large majority, showing clearly on the 
part of the people a desire to place Kentucky abreast of the more pro- 
gressive States of the Union in matters of taxation. We feel that the 
people of the State are to be congratulated upon this wise step. Al- 
though, at present writing, it is unfortunately very uncertain whether 
on account of the failure to observe certain technicalities the amend- 
ment will become a part of the Constitution, nevertheless, the will 
of the people has been most emphatically expressed. They want tax 
reform and they believe in this particular line of tax reform. 

The preliminary report of the Commission. 

The resolution creating this Commission directs it to make two 
reports of its findings. The preliminary report required, was made 
to the Governor on the 12th of February, 1913. This was for the in- 
formation of the public, and to be used as a basis for study and in- 
vestigation, before voting on the proposition of amending the Consti- 
tution for tax revision at the November election. The Commission 
had five thousand (5,000) copies of this report printed and distributed 
throughout the Commonwealth, and also had extracts from and 
synopsis of the report furnished to the newspapers for publication. 

The final report. 

The said resolution, after providing for this preliminary report, 
contained this language: "Said Commission shall also make a full 
report to the General Assembly of one thousand, nine hundred and 
fourteen, whereupon the existence of the Commission shall termi- 
nate. " 

In obedience to these instructions, the Commission begs now to 
submit its full and final report. 



THE RECOMMENDATIONS 



The recommendations and the reasons therefor are fully set forth 
in the following pages of this report. They are finally embodied in 
drafts of several proposed bills. They may be summarized as follows : 

1. It is proposed to establish a permanent Central Tax Com- 
mission in charge of all taxation in the State and responsible for 
the just administration of the tax laws, which shall specifically: 

a. Have and exercise strict supervision over the local assess- 
ment officers, instruct and guide them in all their work, and 
after the term of office of the County Assessors recently elected 
has expired, to organize a corps of expert assessors, under civil 
service rules, to take the place of the one hundred and twenty 
County Assessors who now work without supervision, instruc- 
tion or training. Create larger assessment districts by the com- 
bination of counties into groups, so that assessors shall have 
work enough to occupy them the year round. 

b. Take the place of the present State Board of Equaliza- 
tion. 

c. Exercise control over the local boards of supervisors and 
to guide them in their work. 

d. Do the work of assessing railroads, franchises, bank 
stock and other property now assessed (by ex-officio boards. 

e. Look after the license taxes, inheritance taxes and all 
other taxes. 

2. To change the law so that the initiative in finding and as- 
sessing the property shall lie with the Assessor and the State Tax 
Commission, making it less necessary to depend upon the tax- 
payer's statement, although that statement much simplified in form 
is still retained. 

3. To provide that the Assessor shall be adequately equipped 
with tools to work with, especially with adequate maps, so that all 
property shall be assessed and equitably assessed. 

4. ( To provide that the work of completely revaluing and as* 
sessing of real estate shall be done but once every four years, with 
a view to: 



10 REPORT OF THE SPECIAL TAX COMMISSION. 

a. Greater thoroughness. 

b. Saving of expense. 

5. To amend the law relative to assessments made at present 
by the State Board of Valuation and Assessment (to be succeeded 
by the State Tax Commission) for three purposes: 

a. To correct certain infelicities in the language of the 
statutes which have tied the hands of the Board and led to 
serious litigation. 

b. Increase the powers of the assessing officers, so that 
the assessments may be more equitable and just. 

c. To extend the franchise tax to all franchises. 

6. To actually raise the assessment of all property up to its 
full cash value. 

7. As soon as purpose six is effected, to limit the powers of 
local boards to fix the tax rates, so that the taxpayer can feel as- 
sured that he will not be over-taxed, but such limits may be ex- 
ceeded by special vote of the people. 

8. To so amend the laws relative to the collection of taxes that 
there can be a proper audit, and to make it practically impossible 
for dishonest officials to collect money under the guise of taxes, 
which never goes into the public coffers. 

9. To abolish the "tax sharks," by giving the delinquent tax- 
payer ample opportunity to redeem his property, and then if he 
still fails to pay, turning the property over to the State, so that the 
profit, if any, resulting shall be for the benefit of all the people and 
not for the enrichment of a few (often non-resident) sharpers. 

10. Ultimately to comply with the mandate of the people ex- 
pressed through their approval of the constitutional amendment, 
by exempting public bonds, and making securities, or, in other 
words, mortgages, bonds and other choses in action, a special class 
of property to be taxed by a method which will bring them out 
of hiding. How soon this can be done depends on the decision 
in the case now pending before the Court of Appeals. 

11. To remove all necessity for revenue agents, and abolish 
them. 

12. To revise entirely all of those chapters of the revenue law 
which relate to the taxation of property in general to the follow- 
ing ends : 

a. To insert in their proper place the new provisions, and 



REPORT OF THE SPECIAL TAX COMMISSION. 11 

b. To make the arrangement logical and clear. 
The old law has been patched onto at various times in such fashion 
that it now contains some contradictions, many useless repetitions, and 
is badly arranged. 



Part I. 

GENERAL DESCRIPTION 

OF THE 
PRESENT TAX SYSTEM 



CHAPTER I. 
THE GENERAL PROPERTY TAX 

For the information of persons not already familiar with the pres- 
ent tax system of Kentucky, it seems proper to commence this report 
with a brief description of the aims and of the provisions of the pres- 
ent law. 

Taxable estates. 

It is the aim of the present law that every person should foe taxed 
in proportion to the value of his estate. Under taxable property is, 
therefore, included: real estate, tangible personal property such as 
horses, cattle, furniture and all other goods and chattels, intangible 
personal property such as franchises, and also money and choses In 
action, such as mortgages, notes, stocks, bonds and other funds or 
securities, except stocks and bonds of Kentucky corporations taxed 
in Kentucky. 

Money, mortgages and other credits. 

The important thing to note in this definition of taxable property 
is that the aim of the law is to tax both the property, concretely con- 
sidered, such as land, and also, and in addition thereto, the mortgages, 
securities and the like which stand for and represent the property. 
This is a theory of taxation, once widely held, but now abandoned 
in many States of the Union. It is the opinion of this Commission 
that the taxation of a piece of property at its full value and the taxa- 
tion at the same rate of a mortgage (or other security) standing for 
and representing the same property is an objectionable form of double 
taxation. This is discussed more fully in another place. 

Assessment by County Assessors. 

For the purpose of taxation, all property is to be assessed by the 
County Assessors, except certain classes of property noted below 
which are to be assessed by a State Board of Valuation and Assess- 
ment, composed of certain State officers acting ex-officio. The County 



16 REPORT OF THE SPECIAL TAX COMMISSION. 

Assessors are elected, one in each of the one hundred and twenty 
counties, and serve for four years. They are not eligible for re-elec- 
tion. They are paid by certain fees reckoned upon the valuation of 
the property assessed by them in their counties. It costs, to pay them, 
over one hundred and forty thousand dollars each year. 

Taxpayers' "statements" and oaths. 

Every person having taxable property is required by law to file 
with the Assessor a list or "statement" of his property. He is also 
required to swear to the correctness and completeness of the state- 
ment. The law provides the most elaborate conceivable rules and 
penalties for enforcing these taxpayers' oaths. It would appear from 
the elaborateness of these rules that the entire structure of the assess- 
ment work rests on the assumption that everybody will make a true 
statement. Hence, the law prescribes even the form of the taxpayer's 
oath. In it he must swear that he has given in "all and every species 
of property belonging to" him, "subject to taxation" * * * "in- 
cluding money, notes, bonds or other evidence of debts," * * * 
and that he "will value" his "property at its fair cash value." 

Dire pains and penalties are provided for all who refuse to list 
their property or refuse to take the oath. Dire pains and penalties 
confront the Assessor who fails to administer the oath to any tax- 
payer. With all, as we shall see, these provisions are ineffective. By 
common consent the law is universally evaded. As Professor Daniels 
says in his book on Public Finance (page 123) : 

Some States have sought to uncover personal property through the 
machinery of oaths, affidavits, and the like. The effectiveness of such laws 
is inconsiderable. If Jove laughs at lovers' vows, he probably guffaws at 
taxpa}rers' oaths. Even the Psalmist's hasty allegation of universal men- 
dacity needs little qualification in this province of finance. Where the tax- 
payer's conscience is tender he finds (as one has put it) that virtue is per- 
force its own reward. This phase of the system is described in one tax 
report as "a tax upon ignorance and honesty"; and in another report we 
are told that "the payment of the tax on personalty is almost as voluntary 
and is considered in pretty much the same light as donations to the neigh- 
borhood church or Sunday-school. 

The elaborate schedule. 

The schedule to be filled in by the taxpayer contains one hundred 
items beginning with: "1. Amount of bonds, number and denomina- 



REPORT OF THE SPECIAL TAX COMMISSION. 17 

tion of bonds and value thereof" and ending with "100. Nuniber of 
dogs over four months of age and description of same." As pointed 
out in the Report of this Commission to the Governor, the last item 
is more productive of revenue than the first. 

Despite all these precautions, the Legislature seems to have had 
some doubts as to the "honor of a Kentucky gentlemen," for it pro- 
vides that the Assessor may fix a different value on property from 
that to be sworn to by the taxpayer, and as we shall see later sends 
out spies to find property not reported. 

Preparing the assessment book. 

The theory of the law is that the Assessor shall actually gather up 
the sworn statements of all taxpayers, take them to his office, arrange 
them in alphabetical order and copy the facts therefrom into the °*- 
sessment book. 

The County Board of Supervisors. 

When the Assessor has written these up nicely in the book, he 
turns the book over to the County Clerk, who checks up the figures 
and then lays it before the County Board of Supervisors. These are 
five (in counties where there are cities, two or three more) "intelligent, 
discreet housekeepers and owners of real estate" appointed each year 
by the County Court. They also take a solemn oath. They convene 
in two sessions of from six to twenty days, according to the size of 
the county, with an interval between. They receive three dollars per 
day for their services. They are supposed to go all over the As- 
sessor's work and check it up ; to equalize assessments that are not al- 
ready equal; to assess property omitted, and to hear complaints of 
taxpayers who may be aggrieved. 

The State Board of Equalization. 

This work completed, a report thereof is sent to Frankfort, where 
there assembles the State Board of Equalization. This Board is com- 
posed of "one person from each appellate district of this State," seven 
in all, appointed by the Governor ; together with the Auditor of Pub- 
lic Accounts. Each must be over thirty years old and "he shall be a 
housekeeper and shall be the owner in fee of real estate located in this 
State." The members of this Board hold office one year, but are in 
actual session about ninety days. They are paid five dollars per day 



18 REPORT OP THE SPECIAL TAX COMMISSION. 

during their sessions. They cost the State over six thousand dollars 
in the year 1911. 

The transcript of transfers. 

This Board receives from the County Clerks "tabulated statements 
of the sales of real estate" with "the price paid," etc. The theory 
is that these will show the true value of the land. The fact is, that 
as deeds now seldom state the true consideration, these statements 
contain little information of importance. 

Equalization between counties. 

The State Board of Equalization then proceeds to "equalize" be- 
tween counties by adding to or deducting from the value of the prop- 
erty as assessed such percentages as will make the value conform to 
the true value in money. Whenever they intend to raise a county, 
they send notice of that intention to the county, and the County Court 
may send representatives to object. The same procedure is followed 
in case of a proposed reduction. But this is obviously unimportant. 

This completes the assessment of property that is to be entered on 
the county assessment rolls. 

State assessments. 

Meanwhile, the State Board of Valuation and Assessment and the 
Railroad Commission have been at work assessing other classes of 
property. These are: (1) the physical or tangible property of rail- 
roads valued and assessed where it lies in the State by the Railroad 
Commission; (2) all franchises, bank shares, and distilled spirits as- 
sessed by the State Board of Valuation and Assessment. 

The State Board of Valuation and Assessment is composed of the 
Auditor of Public Accounts, the State Treasurer and the Secretary 
of State. 

Franchises. 

Franchises are, according to the provisions of the Statutes, to be 
assessed in a manner which practically defines the term as the equiva- 
lent of the corporate excess or all intangible property. It is the differ- 
ence between the value of the entire corporate entity as a going con- 
cern and the value of the tangible property. The value of the entire 
corporate property, tangible and intangible, may be ascertained by 



REPORT OF THE SPECIAL TAX COMMISSION. 19 

considering the value of the stocks and bonds which stand for and 
represent the property, or by considering the earnings of the business. 
The property assessed by the State Board of Valuation and As- 
sessment is then apportioned to the counties and districts where it lies, 
and there subject to local taxation as is other property. 

Character of State assessments. 

For a number of years the assessment of property by the State 
Board of Valuation and Assessment, and more especially that of 
franchises, seems to have been made in a somewhat pro forma and 
technical manner. It has been the general impression that the assess- 
ments were too low until two years ago. This Commission feels that 
high commendation is due to the present Board of Valuation and As- 
sessment for the zeal shown in enforcing the law in the past two 
years. That the, increases in the assessments on franchises, which 
were especially heavy, have resulted in some litigation is not unnatural. 

Sheriff collects taxes. 

When all property has been assessed, and the fiscal courts have 
fixed the tax rates, the Sheriff proceeds to collect the taxes. The State 
tax rate has for many years remained unchanged at fifty cents per 
hundred dollars of assessed valuation. The local tax rates vary more 
frequently and are very different in the different counties. The State 
rate is what is technically known as a proportioned rate, fixed that is, 
regardless of the amount of the assessment and hence somewhat with- 
out regard to the amount to be raised. The local tax rates are more 
nearly "apportioned," that is, some consideration is given to the ratio 
of the amount it is desired to raise to the size of the assessment roll. 

The assessment roll no longer a warrant. 

Contrary to the practice in most States and to the almost universal 
theory of tax law in this country, the assessment roll has ceased, ex- 
cept in theory, to be the warrant for the collection of taxes in Ken~ 
tucky. When this occurred, we have not ascertained, for the fact that 
it now is so, is more important than its origin. That it was not al- 
ways so is shown by phrases in the statute, apparently coming down 
from the past, which read, "and shall be the warrant of authority to 
the sheriff or collector for the collection of taxes as therein set forth." 
But curiously enough there is no rigid requirement that the "taxes" 
shall set forth in the assessment book. Generally the roll stops with 
the assessed value, The Sheriff formerly made out tax bills, and when 



20 REPORT OF THE SPECIAL TAX COMMISSION. 

enforced collection had to be made, the law provided for the issue of 
special individual tax warrants. By a recent statute the County Clerk 
makes out the bills and gives them to the Sheriff for collection. This 
is a mere shifting of clerical work. It does not create a proper war- 
rant. The absence of a full and complete warrant of authority still 
remains. Through this gap in the audit system, cartloads of public 
money can be diverted into dishonest pockets, and some has been. That 
not more has been stolen than has been, only demonstrates the gener- 
ally high character of the county officials. The government has no 
adequate means of establishing a claim to all money collected by the 
Sheriff, nor has the Sheriff any adequate means of defense against 
an accusation that he has collected money and not turned it over. 

Collection of delinquent taxes. 

If the taxes are not paid when the period allowed for payment has 
expired, they become delinquent. Then the penalties and interest 
begin to accrue. The Sheriff then proceeds to collect by seizure and 
sale. Property seized is sold at public auction; if no bidder appears, it 
is knocked down to the "State, county and taxing district having taxes 
against the delinquent." Certain evils growing out of this method will 
be discussed later in this report. 

"Omitted property." 

Although the Legislature has been at great pains to require tax- 
payers to report their property and has laid strict injunctions upon 
the Assessors, Boards of Supervisors and the State Board of Equaliza- 
tion to search out and assess all property, it seems to have had 
premonitions of failure. These premonitions are borne out by the 
facts. So the Legislature has provided that if the Sheriff shall find 
out any property not assessed, he may assess it and collect the taxes. 

Revenue agents. 

But in addition to this precaution, the law provides for "revenue 
agents." Of these there may be one in each county appointed by the 
Auditor of Public Accounts and four at large. They have power to 
"cause to be listed for taxation all property omitted iby the Assessor, 
Board of Supervisors, Board of Valuation and Assessment or Rail- 
road Commission." They are paid by a penalty of twenty per cent, 
of the taxes recovered as a commission for their services. 



REPORT OP THE SPECIAL TAX COMMISSION. 21 

In 1912 the Legislature created the office of "Supervisor of Rev- 
enue Agents," thus again expressing its dissatisfaction with the tax 
system in its operation. But we cannot say that the improvements 
which followed have been fundamental. 

It seems fair, therefore, to say that the whole tax system is 
predicated on the assumption that all property will not be placed on 
the assessment roll in the first instance. 



CHAPTER II. 
OTHER REVENUES 

I. STATE REVENUES. 

j 
v \ 

Difficulty of compiling data. 

In addition to the taxes on property in general, the State has many 
other sources of revenue. 

As stated in our preliminary report, it is not at all easy to present 
a clear outline of these. 

The difficulty lies in the form in which the Auditor's Reports are 
compiled and printed. These forms are in part traditional, and in part 
conform to antiquated provisions of the law, which may have at some 
time or other served some good purpose, but at present lead only to 
obscurity. 

It may be out of our province to take up this matter. But it is 
very important. The Auditor and his whole staff, as well as the 
Treasurer and his staff, are a unit in declaring that the general system 
of accounts needs modernizing. They cannot make many changes be- 
cause of hampering restrictions of the law. The underlying books are 
most excellently kept. But the segregations and compilations as pub- 
lished are not clear, nor do they afford the information that the pub- 
lic is entitled to. If this Commission, with the aid of its experienced 
expert, and the assistance generously furnished by the Auditor's staff, 
has found so great difficulty in getting the statistical returns neces- 
sary, it is certain that the general public will not be able to untangle 
the reports. We shall be happy to endorse any plan looking toward 
an improved accounting system. 

The revenue and expenditure account. 

The main trouble is that there is no balanced revenue and ex- 
penditure account. There can foe none, because the law requires, in 
some cases, that funds be paid into the treasury and accounted for 
en gross, while in other cases very similar funds are paid in and ac- 
counted for net only. Again, while in some cases funds are set forth 
in great detail, in other cases no detailed statement whatever is pre- 
sented. When printers' errors creep into the published reports, as 



REPORT OF THE SPECIAL TAX COMMISSION. 23 

they will, in spite of all precautions, there is no way, by counter- 
balancing, to detect whether the error is in the items or in the total. 

Continuing appropriations. 

Other bad features are continuing appropriations, without rever- 
sion of balances to the treasury, appropriations by inference, appro- 
priations in indefinite amounts. We believe that the statutes flagrantly 
defy the plain mandate of the Constitution that no money shall be 
paid out of the treasury without an appropriation. 

Aggregate State revenues. 

On account of the difficulties above set forth, we feel by no means 
sure that the figures tabulated below are correct to a cent or even to 
a hundred dollars, nor that our segregations are in every case proper. 
But they set forth the main facts correctly enough for present pur~ 
poses. 

We have used the Auditor's published report for 1911 for the pur- 
pose of illustrating the general revenue system. The biennial report 
for 1912-1913 is not printed yet, and if it were, would not be so rep- 
resentative as that for 1911. This is because of the arrearages in the 
franchise taxes and the litigation thereover. The later figures, if de- 
sired, can be found in the Auditor's report, which goes to the Legis- 
lature at the same time with this. 

A. COMMONWEALTH RECEIPTS FROM TAXES PROPER. 

1. The General Property Tax. 

"Sheriff's Revenue" 1910 $3,910,480.00 

Same, back taxes, 1905-1909 3.219.95 

Same, advance payments, 1911 17,033.68 

Revenue Agents' collections 15,041.59 

Tax on National Banks shares 87,551.85 

Tax on State Bank shares 76,474.16 

Tax on distilled spirits 145,730.71 

Tax on miscellaneous corporations, franchises 89,879.79 

Tax on railroads, tangible property 333,180.20 

Tax on railroad franchises 221,335.60 

Total General Property Tax $4,899,927.53 

2. License Taxes. 

''Clerks" $577,796.24 

This contains $71,155.50 of fees which we have not cut out because not 

traditionally separated. The items entering into this total are: 

Fees (miscalled taxes) for recording deeds, mortgages and powers of 



y 



24 REPORT OF THE SPECIAL TAX COMMISSION. 

attorneys, for issuing marriage licenses, for seals; licenses for taverns, bars 
of various classes, distilleries, merchants' druggists' liquor, breweries' 
agents, bottling, soda fountains, etc., circuses, etc., exhibitions and con- 
certs, theaters, skating rinks, merry-go-rounds, bowling alleys, billiard and 
pool tables, cane racks, etc., shooting galleries, solicitors of pictures, ven- 
dors of (spectacles, vendors of stoves, dealers in playing cards, dealers in 
pistols, pawnbrokers, stamp companies, dealers in tobacco, dealers in petro- 
leum, loan companies, stud licenses, jack licenses, bull licenses, peddlers, 
patent medicines, piano and organ agents, photographers, railroad eating 
houses, restaurants, auctioneers, bill posters, wharf boats, feather renova- 
tors, real .estate agents, sewing machine agencies, laundries, ferrys, fortune- 
tellers, hack lines, ice-factories, brokers, dealers in oleomargarine, circuit 
.court suits, and sundry others. 

Dog taxes, 1909, '10 and '11 . $108,418.09 

Tax on wholesale liquor dealers 19,420.00 

Tax on rectifiers 49,330.55 

Tax on breweries 8,390.00 

Corporation license tax _ — 94,664.63 

Motor license fund 21,355.50 

Fire tax fund 15,783.19 

Tax on meat 531.25 

Total license taxes $895,689.45 

3. Inheritance Taxes $106,291.35 

4. Tax on foreign insurance companies 290,006.75 

Grand total ALL TAXES PROPER, 1911 $6,191,915.08 

B. STATE FEES. 

1. Secretary of State 12,354.05 

2. Insurance department 40,779.66 

3. Tax on organization of corporations 38,061.45 

4. Jefferson county fees $243,236.95 

Less commissions, etc 176,923.40 

66,313.55 

Total all STATE FEES $157,508.71 

C. EARNINGS STATE FUNDS, AND SALES. 

1. Interest on State deposits $9,709.96 

2. Land office 1,919.05 

3. Forfeited lands 1,061.60 

4. Turnpike dividends 1,873.91 

Total earnings $14,564.52 



REPORT OF THE SPECIAL TAX COMMISSION. 25 

D. INSTITUTIONAL EARNINGS, OR REFUNDS AND KINDRED 

ITEMS. 

Penitentiary $224,425.37 

Branch Penitentiary 77,896.86 

Asylums 6,558.40 

State Colored Normal School 6,525.00 

State University _— 38,475.00 

Kentucky School for Deaf 16,966.60 

Public Offices 6,309.60 

House of Reform 4,003.68 

Public grounds . 79.70 

Public buildings 142.66 



Total _________„__ . -__________$381,382.87 

E. FINES AND FORFEITURES. 

Gross amount $258,376.69 

Less commissions 193,746.38 



Total $64,630.31 

With some exceptions, but none of very large amounts, the above 
revenues are practically net, and the sum of them gives the clear in- 
come available for State expenditures. Some, of course, are mere 
offsets on far larger expenditures. 

SUMMARY OF NET REVENUES, 1911. 

A. Taxes proper $6,191,915.08 

B. State fees 157,508.71 

C. State earnings 14,564.52 

D. Institutional earnings 381,382.87 

E. Fines and forfeitures 64,630.31 

Total net revenues $6,810,001.49 

F. BOOKKEEPING ENTRIES. 
Transfers and Refunds. 

A. H. & S. Bureau appro. $194.52 

Military fund 334.96 

Money refunded 13,848.81 

Inspector of Mines appro. : 3,965.00 

State Capitol appro. 8,770.37 

Text book fund 380.00 

Active militia 81.75 

Governor's contingent fund 40.35 



26 REPORT OF THE SPECIAL TAX COMMISSION. 

State Board of A. F. & I. l,502.00t 

Commissions deducted above $370,669.78 

Trustee jury fund 9,057.48 

Cost of suits 169.00 

Court of Appeals 1,527.35 

Total bookkeeping receipts $410,541.37 

G. UNCLASSIFIED. 

"Miscellaneous" $11,950.54 

Less "Over" in our footings 0.03* 

Total unclassified $11,950.51 

Summary: 

Net revenues $6,810,001.49 

Bookkeeping entries 410,541.37 

Unclassified 11,950.51 

Total receipts as reported by Auditor $7,232,493.37 

•fOmitted in Auditor's printed Summary. 

*The Auditor's report, page 220, shows a footing of $7,232,493.37, which is 
$1,501.97 more than the sum of the items. The difference arises from $1,502 collected 
from the State Board of Agr. F. & I. omitted from the table and a printer's error 
of three cents. 

Rough estimate for 1912 or 1913. 

Owing to the litigation over the franchise taxes, only a rough esti- 
mate can be made of what the revenues for either 1912 or 1913 will 
he when finally collected. 

But we may estimate them as approximately $7,000,000, clear of 
all bookkeeping entries and miscellaneous, or about $7,500,000 gross. 
For further details the reader is referred to the Auditor's report, 
which will appear shortly. 

Analysis of the receipts. 

Out of a net revenue of $6,800,000, in round numbers, the State 
derives $4,900,000, or 72% from the general property tax. Of the 
$4,900,000, $3,950,000, or 81%, came from the "ordinary taxpayer" 
and $850,000, or 19%, from the corporations. But the last figure, 
$850,000, will be raised by at least a quarter of a million, or to 
$1,100,000, by the increased assessment made in 1912 and 1913, or 
say, to 22% of the whole. 

Of the total net revenue, about $800,000, or about 12%, comes 
from license taxes, which in effect supplements the property taxes. 

Of the total net revenues $6,200,000, or 90%, comes from taxes 
proper. 



r~ ; CHAPTER III. \ 1 

i ii ! 

LOCAL REVENUES 

Difficulty of obtaining data. 

There is no central State bureau which compiles any data con- 
cerning local taxes. We have, therefore, been obliged to collect such 
data as we could ourselves. The extreme inertia of some of the 
county officers to whom we have been obliged to write for informa- 
tion, has made this a very difficult task. Repeated letters had to be 
written and the data were far from perfect in some cases when re- 
ceived. 

Census returns of 1902. 

The last complete compilation by the United States Census Bureau 
was in 1902. Of course, conditions have changed materially in the 
past decade. But the proportions will be somewhat the same. In that 
year the total public revenues, State and local, for Kentucky, were 
reported as follows : 

All revenue receipts, State and local, 1902 $16,357,667 100% 

State 4,232,700 26% 

Counties 5,410,552 33% 

Cities over 25,000 population 3,551,251 22% 

8,000 to 25,000 — 696,164 4% 

All other minor civil divisions 2,467.000 15% 

The above totals, however, seem to contain some duplication, the 
so-called subventions, for example the State school monies. Conse- 
quently, the following table is probably better: 

Total Kentucky, all government revenues. 1902 $12,629,505 100% 

State 4,211,325 34% 

Counties 3,680,864 29% 

Cities over 25,000 population 3,317,647 26% 

8,000 to 25,000 652,669 5% 

Other minor civil divisions 767,000 6% 

If the same general proportions hold true for 1913, the following 
table would represent the conditions today. 
Probably the figures are not far out. 



28 REPORT OF THE SPECIAL TAX COMMISSION. 

Total Kentucky, all government revenues, 1913, approx. $20,000,000 

State 6,800,000 

Counties 5,800,000 

Cities over 25,000 5,200,000 

8,000 to 25,000 1,000,000 

Other minor civil divisions 1,200,000 

One-third each to State, counties and cities. 

In short, the State takes over one-third of the revenues, or 34%, 
the cities about 31%, and the counties and school districts about 35%. 
It is probably near enough to assume that they are each one-third, as 
city expenditures generally grow faster than State and rural, and the 
cities have probably caught up. 

The counties rely mainly upon the general property tax, but they 
also receive the poll tax and large subsidies from the State. The 
cities also have, besides the general property tax, a considerable in- 
come from licenses. 

Reports obtained from county officers. 

Our own investigations of local revenues have not been as fruitful 
as we wished them to be, although we have expended a very large 
amount of time and energy upon them. We circularized the one 
hundred and twenty counties for data, but the replies were slow in 
coming in and many follow-up letters had to be sent. Finally answers 
were received from all but three counties. But of the answers re- 
ceived not all were intelligible. The main source of confusion was 
the failure to state clearly the aggregate tax rates, that is, the general 
county levy for all purposes other than schools and the county school 
rate, where there was one. We did not try to go into the matters of 
school district special taxes, for the obvious reason that if we could 
not elicit from the county officers, in an intelligible form, the simple, 
facts concerning county rates, it would be hopeless to ask for more 
data, of a far more complex character. 

Intricacy of the problem. 

How intricate the problem is may be illustrated by one county. 
We select one about as simple as possible. Henry county has a county 
tax rate of fifty cents, of which twenty-five is for roads and bridges, 
and twenty-five for general expenses ; also a county school tax of fif- 
teen cents, levied on all parts of the county outside of ten school dis- 



REPORT OP THE SPECIAL TAX COMMISSION. 29 



tricts, and there are school tax rates ranging from twenty-five to fifty 
cents in the ten districts. To get the exact amount of taxes levied we 
should have to ascertain just how much assessed property lies in each 
district, and how much outside. This is a simple case compared with 
other counties. 

No part of our investigations showed us more clearly the absolute 
necessity for the guiding hand of central authority, to invoke uni- 
formity and to install something like business exactness. 

Tables printed in the Appendix show the details so far as obtained. 
The tax rates there used are the State rate, the county rate, and the 
school rate as reported. Whether the latter applies all over each 
county so reporting or not, we cannot say. But we believe that our 
figures are too low to show the total taxes levied. 

i 
Analysis of the local tax returns. 

Taking the figures obtained at their face value, the most common 
county tax rate is fifty cents per one hundred dollars of assessed valua- 
tion. Twenty cents is the most common school rate, but many local 
district special rates exceed that. The lowest tax rates, for county 
purposes only, aggregate thirty-one cents, the highest one dollar and 
forty-five cents. The high rates are generally in counties which are 
paying railroad bonds. The total taxes on property for the one hun- 
dred and seventeen counties reporting are $4,850,000, and allowing for 
the three omitted counties, the aggregate would be just about 
$4,900,000, or about the same as the State property tax. Add to this 
another million, nearly, raised by poll taxes and from other sources, 
and we have the $5,800,000 given in the above table. 

i 

The ratio of taxes to true value. 

Incomplete as the figures are, they seem to indicate that the ratio 
of all the taxes to the true value of all property outside incorporated 
cities is about two-thirds of one per cent. 



Part II. 

THE DEFECTS OF THE 

KENTUCKY TAX SYSTEM 
AND THE REMEDIES 



CHAPTER I. 
THE TWO MAIN DEFECTS 

We may now point out certain evils which have grown up in and 
upon the existing tax system. 

All property is not taxed. 

First. All property, not even all real estate, and not even all land, 
is regularly and uniformly entered in the assessment hooks. Some 
property, even some land, escapes taxation every year. It is some- 
times claimed that land which is always in sight and cannot be carried 
away or concealed is always taxed. Those who make this statement 
are usually urging that personal property should be taxed and that it 
is personal property which escapes. There is no question but that 
much taxable personal property escapes. It is always harder to find 
than real estate. But when, as we have found, real estate escapes ; 
when that which is easiest to find escapes ; then, how much more cer- 
tain it is that personal property, that which is hard to find, and to 
assess, escapes in even greater proportion. 

■ 

Discrepancies in acreage returns. 

The large discrepancies from year to year in the total acreage of 
land assessed, both in individual counties and in the whole State, can- 
not be explained on any other hypothesis than that land escapes taxa- 
tion. They cannot be explained away as clerical errors. If they could 
be, the matter would be quite as bad. For if clerical errors of such 
dimensions occur so regularly in one part of the roll, there is great 
probability that they occur also in other and more vital parts of the 
roll. If, in Caldwell county, there were 212,347 acres of land assessed 
in tracts in 1911, where were some of those acres in 1910 when only 
191,759 acres were so assessed? Campbell county has a superficial 
area of 92,800 acres, yet there were only 64,854 acres assessed in 
tracts in 1912. That the difference of nearly 28,000 acres was not in 
town lots in Newport, Dayton and Bellevue is demonstrated by the 
fact that there are 88,274 acres found by the Census Bureau in farms 
alone in that county. Why were there 24,500 acres not in evidence 



34 REPORT OF THE SPECIAL TAX COMMISSION. 

on the rolls? If in 1908 the Assessor in that same county found 
91,823 acres in tracts, and in 1910 again 91,328 acres, where had some 
of these acres gone to in 1912 when only 64,854 were left? Land is 
not peripatetic. We might cite very many more equally inexplicable 
examples. These were selected at random. 

Comparison of acreage assessed in "tracts" with census returns of 
"farms." 

In many counties there are more acres in farms than are assessed 
in tracts. How can this possibly be the true return? 

There are, of course, in nearly every county some "tracts" of land 
not included in farms, such as forest or mineral lands. Hence, the 
acreage assessed in tracts should normally exceed the acreage re- 
ported in farms. Conversely it is hardly conceivable that there should 
be more acres in farms than are assessed in tracts, if the assessment 
be complete. But the fact is that there are at least thirty-three coun- 
ties in which there are more acres in farms than there are acres as- 
sessed in tracts. The total acreage of farm lands thus unassessed in 
these thirty-three counties alone is far more than 200,000 acres. How 
much more there is in these and other counties we do not know, but 
that it is very large is certain. 

This estimate ultra-conservative. 

This startling revelation is based on an estimate in which were 
rejected all counties where the figures seemed to be too erratic to be 
reliable, and which ignored the fact that in the tracts actually assessed 
there was also some acreage not in farms. One extreme case cited 
above, that of Campbell county, was entirely ignored. In short, it was 
an estimate which strained every point in favor of the assumption that 
the assessment was complete. We wished to be extremely conserva- 
tive. The fact that at the very least 200,000 acres of farm land es- 
cape taxation in thirty-three counties alone, seems to us indisputable. 

The complete tables. 

In the Appendix to this report are tables setting forth for each 
county the best available statistics as to the assessment of lands. The 
curious reader can pick out even more glaring inconsistencies than are 
here pointed out. 



REPORT OF THE SPECIAL TAX COMMISSION. 35 

Weakness of the tax law. 

But even if these figures were not available, or if they could be 
controverted, which seems to us impossible, the fact that property is 
escaping can be just as readily inferred from an examination of the 
tax laws, the practices prevailing in their enforcement and the tax 
administration. 

Over-dependence on taxpayers' statements. 

The great dependence that is placed on the taxpayer's statement 
is the first weakness. It is not safe to assume that the taxpayers will 
list all their property. We know that they don't and won't. Every- 
body knows it. The law itself confesses as much, as we pointed out 
in our brief description of the law. The correctives depended on are 
weak in the extreme. 

The handicaps imposed on the Assessor. 

The first corrective is supposed to be applied by the Assessor. 
But the conditions under which he has to work as provided by law 
are such as to make this corrective ineffective. 

The Assessor not eligible for re-election. 

In the *first place, the Assessor is not eligible for re-election. This 
very nearly insures that the Assessor, when chosen, shall be ignorant 
of the duties of his office. The only chance of getting an experienced 
man lies in electing some Deputy Assessor or a former Assessor, four 
or eight years out of office. Yet the work of making an assessment 
is a highly technical business and not easy to learn. The tax law 
alone is long, intricate and hard indeed to learn. There are nearly 
one hundred different classes of property enumerated in the tax 
schedule, and many more besides not enumerated, with the value of 
all of which he is supposed to acquaint himself. Knowing, moreover, 
that he must go out of office in four years, the Assessor has little in- 
ducement to train himself to the performance of his duties in more 
than a perfunctory and pro forma fashion. Moreover, during the 
whole four years, he is actively engaged in assessments- but sixteen 
months, that is, four months each year. Eight, months each year, ex- 
cept in a few large counties, he is busy with his own private affairs. 
With but few exceptions, he is not paid enough to devote all his time 
to the office, even if the law required it. All of the four months are 



36 REPORT OF THE SPECIAL TAX COMMISSION. 

devoted to a hasty gathering up of the schedules and to copying them 
into the book. He has little time to study the property, study methods, 
to gather data or to do anything else than the minimum that the law- 
requires. 

Assessor works without supervision. 

He works without adequate supervision, guidance or instruction. 
If, as fortunately but not necessarily, frequently happens, some of his 
fellow county officers, especially the Sheriff and the County Clerk, 
are men experienced in county affairs, he gets some instructions and 
suggestions from them. He can sometimes go to his predecessor for 
help. He usually has the County Judge and County Attorney to help 
him on law points. Beyond such fortuitous assistance, he has to 
fumble for himself. He works without a boss, although at first a 
green hand. He knows that the supervisors can do very little to 
check his work. They have no better tools than he has and have but 
a few days in which to go over his four months' work. The State 
Board of Equalization and the Auditor are so very far away, and 
they communicate with the County Clerk, not with the Assessor. 
Moreover, the County Court is required by law to take the Assessor's 
part against the State Board, so he does not worry about that State 
Board. 

Assessor works without tools. 

He has no adequate tools to work with. As he is not continuously 
at work at the courthouse, he seldom has an office room of his own. 
He is furnished with blank forms and with books. He has last year's 
roll to go by. We do not overlook the fact, nor its importance, that 
he has a transcript of all transfers and of mortgages, etc., so far as 
recorded, furnished him by the County Clerk. This last is as it should 
be and an excellent provision. But otherwise than this he must make 
bricks not only without straw, but without molds, or a brickyard to 
dry them in. 

Assessor has no tax maps. 

Above all he has no maps to go by. Proper tax maps are the sine 
qua non for a complete assessment of lands. It is not possible to know 
whether all lands have been assessed without a map, and it must be 
a good map, too. It is not possible to check up a taxpayer's state- 
ment accurately without a map. In a few counties there are maps. 



REPORT OF THE SPECIAL TAX COMMISSION. 37 

Some of these are good, some are very poor. But they are very rare. 
They have been provided voluntarily by the fiscal courts and are not 
required by law. 

Why doesn't the Assessor have maps? In the first place, the law 
does not require it. In the second place, he can ill afford the expense 
out of his own compensation. In the third place, even if the Fiscal 
Court should provide the funds for making them, the Assessor is 
seldom sufficiently informed, until near the end of his term, to in- 
struct a surveyor as to what should go on the map. By that time he 
generally feels that it is not worth while, because the benefit will ac- 
crue to his successor and not to himself. Moreover, he has no idea 
as to whether his successor would want to use the maps. 

Assessment analogous to an inventory. 

Assessing the multifarious properties in a county is analogous to 
taking a valued inventory of the stock in a great department store. 
What business man would employ a green clerk for such an inven- 
tory, set him to work without a word of instruction as to where things 
are or what they are worth, and give him nothing to go by but last 
year's inventory and the list of new purchases, and then go away and 
let him shift for himself as best he could? If, having once committed 
such a folly, what business man would, as soon as that inventory clerk 
had acquired by himself a little knowledge and experience, discharge 
him and put in another man whose sole qualification had to be that 
he had never done any of that kind of work before? Can a carpenter 
build a house without plans or specifications, and without tools, with- 
out a hammer, saw or a plane? Yet this is what the law expects the 
Assessor to do. 

Assessor subject to bad political influences. 

The political influences under which the Assessor does his work 
are bad and are all the worse because he cannot succeed himself. If it 
were thought that ineligibility for re-election would conduce to the 
greater independence of the Assessor, it has proven a mistake. The 
Assessor can run for another office, and frequently does. Every elected 
Assessor is naturally considerate of the good will of his constituents 
and the more so when they are his friends and neighbors. But the 
unfortunate feature is that he is never going to be judged by his rec- 
ord for efficiency and skill as an assessor. Efficiency as an assessor is 



38 REPORT OF THE SPECIAL TAX COMMISSION. 

very apt to make enemies. The tax dodger hates a good assessor. 
But a reputation as a skilled assessor is no proof that a man will make 
a good sheriff or a good county clerk. It is more to the Assessor's 
interest to make and keep friends than to make a reputation for good 
work in an office to which he cannot again aspire. This Commission 
favors appointed Assessors wider civil service rules. But the de- 
velopment of skilled Assessors may be possible under an elective sys- 
tem. In States where an Assessor can succeed himself and where the 
office is large enough to be one of dignity, the people have shown a 
decided inclination to re-elect men who make good Assessors. The 
fact that the Assessor has made enemies of the tax dodgers is a good 
card for popular favor. 

Assessment districts too small. 

The Assessors' district in Kentucky is usually too small. This 
means low pay, poor tools and lack of dignity. Some counties are 
large enough, but most are not. The taxpayers generally get what 
they pay for in the way of service, seldom any more. To divide the 
pay that is available between four or five men instead of employing 
one is wasteful. It is like using five little engines to haul one little 
car apiece, when one big engine could haul all five cars at once. 

The Assessor's work should be of a professional character. 

The work of an Assessor is technical, difficult and hard to learn, 
but very interesting, and, that being so, the office should offer an honor- 
able and attractive life career. But in our State, save for a few City As- 
sessors, there is no professional spirit possible among the Assessors. 
The County Assessor, even in large counties, regards his office — the 
law compels him to do so — as a temporary employment, not as a trade, a 
career or a profession. In States where the Assessors have a chance 
to make their work a career, we find them often forming voluntary 
Assessors' associations, traveling many miles at their own expense to 
annual conventions, where they profit by the mutual interchange of 
ideas. In such cases also we find them constantly studying their work 
and its methods, searching everywhere for improvements, and even 
making recommendations to the Legislature for changes in the tax 
laws, recommendations often so sound that the Legislature comes to 
rely on them. In short, they take that pride in their work which every 
man who is master of a trade takes in his work. 



REPORT OF THE SPECIAL TAX COMMISSION. 39 

The system, not the Assessors, to blame. 

The Commission wishes it to be distinctly understood that its criti- 
cism is directed against the law and the tax system, and not against 
the Assessors as a class or individually. It distinctly disclaims any 
intention to reflect on any Assessor. It is its opinion that the As- 
sessors generally do better than could be reasonably expected of them, 
considering the handicaps under which they labor. Moreover, there 
are not a few cases where men of unusual force and rare ability have 
well nigh overcome the impediments. But these exceptions do little 
more than prove the rule. 

The City Assessor in Louisville. 

That the trouble lies with the law and not with any local conditions 
is fully demonstrated by the fact that in the office of the City As- 
sessor in Louisville, which is independent of the State law, and hence 
not under the same handicaps, we find a very nearly perfect model of 
what an Assessor's office should be. It is well housed, well furnished 
and adequately manned. It is equipped with excellent maps, system- 
atic records and all up-to-date methods. The City Assessor, feeling 
secure in his office, so long as he performs his duties skillfully, adds 
to that security daily by making a constant study of the best ways and 
means of improving the efficiency of his office and the completeness 
and uniformity of his assessments. He regards his office as a pro- 
fession and a career for which he has trained himself for years. 

The handicaps on the Boards of Supervisors. 

The second corrective relied upon for catching up the errors and 
omissions in the taxpayers' returns is the County Board of Super- 
visors. This is not especially effective. These boards generally com- 
pare the new roll with the last year's roll, which is just as likely to be 
defective as the new one. As a matter of fact, they cannot in a few 
days review four months' work. Their function as a board of review 
to hear disputes between taxpayers and the Assessor is valuable. 

Lack of uniformity. 

The second criticism of the existing tax system is that property is 
not uniformly assessed. There are glaring inequalities between indi- 
viduals and between different counties. 

These arise from the same defects in the law that were above 
pointed out as the reasons why some property escapes entirely. Those 



40 REPORT OP THE SPECIAL TAX COMMISSION. 

defects in the law have been set forth at length above, and hence, all 
that we need to say here is that the inequalities noted are not worse 
than they might be expected to be. If we did not carry our investiga- 
tion beyond the analysis of the law above given, we would know that 
there are inequalities just as there are omissions. 

The extent of the inequalities. 

It is difficult, without going to greater expense than this Commis- 
sion was authorized to incur, to ascertain exactly how much these in- 
equalities are. It would scarcely profit us, inasmuch as their existence 
is universally known and admitted, to attempt to measure their exact 
amount, or to delve into individual cases. But we have been able to 
make a satisfactory and instructive comparison between the assess- 
ments of farm lands and the improvements thereon in each county and 
the true value of farms as returned by the United States Census 
Bureau. The full tables are printed in the Appendix. The figures 
have been, to some extent, checked by personal inquiry and by a series 
of affidavits from various sources on file in the Auditor's office at the 
State Capitol. The main facts are fully confirmed and supported. If 
in some cases the precise true ratios of assessed to true values difle* 
a little from those shown in our tables, that difference will not ma- 
terially affect the general conclusion, which is, that grave inequalities 
between counties do exist. Just how much they are is not so impor- 
tant at present. 

Farm lands assessed at fifty-two per cent, of true value. 

Thus our tables show that the average ratio of assessed value to 
true value of farm lands throughout the State is about fifty-two per 
cent. This establishes the fact of universal undervaluation, although 
the law calls for full value, and even if, let us suppose, 40 or 60% 
instead of 52% were the correct figures, that conclusion would be 
just the same. Again our tables show that the range is from 30% 
in Taylor county to 80.6% in Jackson. This proves grave inequality 
between counties, and even if Taylor should eventually prove to be 
assessed at 40% and Jackson at 70%, inequality exists just the same. 
For another purpose the accuracy of the general State average is im- 
portant, and on that account no pains have been spared to ascertain 
the correct figure, which we place at 52%. 



REPORT OF THE SPECIAL TAX COMMISSION. 41 

The significance of the inequalities. 

That such grave discrepancies as the difference between 30% and 
over 80% exist between different counties is a very serious matter. 
That the State Board of Equalization is powerless to correct this, is ad- 
mitted by that board itself, and is amply sustained by all the facts. 

Inequalities affect the apportionment of the State tax. 

These discrepancies between counties affect the distribution of the 
burden of the State tax. They do not affect the division of the burden 
of county taxes between individuals. But if one county succeeds in 
keeping an undervaluation which averages less than those of other 
counties, it saves money on State taxes at the expense of other coun- 
ties. Each taxpayer in such a county saves his share of the aggregate 
county saving. Each taxpayer in overassessed counties conversely 
pays too much. 

Illustration of the effect of inequalities. 

We may illustrate this by a concrete example. Jackson county 
lands were assessed at $1,153,593 in 1911. The State tax thereon 
was $5,768. If $1,153,593 is 80.6% of the true value, that true value 
would be in round numbers $1,430,000. 52% of that, or the State 
average, would be $743,600. In other words, if its lands were assessed 
at the same percentage of true value as the average for the State at 
large, Jackson county would pay 50 cents on each $100 in $743,600 
to the State, or $3,718. It did pay $5,768, which is $2,050 more than 
$3,718. That is, Jackson paid $2,050 more in State taxes than it 
should have paid if all assessments had been uniform. We are satis- 
fied that $2,000 saved would mean a great deal to a little county like 
Jackson. Taylor county, on the other hand, paid too little. If $985,357, 
at which its lands were assessed, is 30% of the true value, that value 
is $3,284,523, and 52% of that is $1,707,952. If, therefore, Taylor 
county lands had been assessed at the State average, they would have 
paid in State taxes $8,539, whereas they did pay only $4,926, or $3,613 
too little. The overassessed counties made up the difference. 

It is not claimed that these figures are absolutely accurate. It may 
possibly have been that Jackson county paid only $1,000 too much and 
Taylor only $2,500 too little. The important thing in this connection 
is simply this : that equality, even approximate equality, is not achieved 
and cannot be achieved under the old law. Everybody familiar with 



42 REPORT OF THE SPECIAL TAX COMMISSION. 

the workings of the present system knows that to be the case. The 
State Board of Equalization goes on record almost every year to that 
effect. We have not been able to find anybody who denies the in- 
equalities. 

Equalization does not equalize. 

It is useless to blame the State Board of Equalization for this. 
The law restricts it to certain definite sources of information which 
are not of any use. It is not constituted in a way to give the service 
that should be had at this point in the tax work. 

The correct method of equalization. 

Proper equalization requires a continuous investigation of values, 
continuous and ample records. The State Board of Equalization ap- 
pointed for a single year and working but ninety days in each year, can 
conduct no regular and continuous investigations, and has no records. 
The law provides it with transcripts of transfers, etc. But these prove 
of little use because the taxpayers have become very "wise." The 
great majority of deeds nowadays do not show the true consideration 
paid. "One dollar and other considerations" makes a valid deed. But 
such a statement is not of much use to the State Board of Equaliza- 
tion. 

The true consideration to be named in deeds. 

It would be possible to enact a law compelling the grantor to recite 
in full the true consideration in the deed. We believe such a law 
would be beneficial in many ways. Minnesota has such a law, and 
by means of it the State Tax Commission is able to keep track of ail 
values fairly well. But that commission does not depend solely upon 
that source of information. 

The two counts: omitted property and inequalities. 

If these two counts in the indictment of the Kentucky tax system 
be sustained, or if either one of them be sustained, the condemnation 
is sufficient. // property is escaping taxation in large quantities, or if 
grave inequalities exist, or if both are the case, then the system needs 
radical reform. 



REPORT OF THE SPECIAL TAX COMMISSION. 43 

Minor faults. 

There are, however, a number of other minor faults more tech- 
nical in character, each serious in itself. Some of these seem to have 
arisen from amendments made from time to time in the law without 
proper care to preserve the relationships of different provisions. 
These will be the subject of a separate chapter. 

The sources of the evils. 

To sum up: We may say that the two great evils noted arise from 
(1) too great dependence on self-assessment by the taxpayer; (2) the 
lack of power, and of experience of the Assessors; (3) the lack of 
proper tools for the taxing officials to work with, notably, maps; (4) 
the entire absence of supervision and control; (5) inadequate means 
of equalization. 

Prevention better than cure. 

To start out with a roll known to be defective and try to patch it 
out is not a sensible business-like procedure. The thing to do is to 
make the roll right in the first place. It is easier to lock the barn door 
than to send the Sheriff after the stolen horse. It is better to prevent 
an epidemic than to build pest houses. A pre-audit is better than 
sending a defaulter to jail. 

It would be easy to assemble many pages of citations from the 
reports of tax commissions in other States and from the text book 
writers, showing that "equalization"' after the roll is made is uni- 
versally a failure. But it is not necessary to burden the Legislature 
with such citations. The fact that "equalization," so-called, does not 
equalize in Kentucky is all too well known. 

Make the roll right to begin with. 

The remedy we suggest among our recommendations is to make 
the roll right to start with ; to equalize before, not afterwards ; to so 
arm, instruct and train the Assessor that there will be no necessity 
for "equalization," save as a mere safeguard against accident. The 
ounce of prevention which we propose in place of the pound of cure 
will be set forth in another chapter. 

Land and improvements should be separately assessed. 

A fertile source of inequalities is the lumping together in one as- 
sessment the value of the land and the value of the improvements 
thereon. 



44 REPORT OF THE SPECIAL TAX COMMISSION. 

This practice prevents a careful consideration of the two differ- 
ent parts of the property. It tends to bring about an undervaluation 
of unimproved lands by concealing the unit values of the improved 
lands adjacent to them and of the same quality. 

A property tax should be levied on property, not on persons. 

There is a great difference between the law of taxation and the 
practice of taxation in all parts of the United States. That which is 
taxable is not always taxed. But the best tax systems are found 
where the law prescribes measures which are enforced, and the worst 
tax systems, where the provisions of the law are unenforceable, or 
for more or less good reasons are unenforced. 

Many practices grow up winked at by the authorities which are 
clearly illegal, but which are aimed to correct evils which the literal 
enforcement of the law would create. When the law thus lags be- 
hind the practice, the practice is almost certain to develop new and 
even greater evils. Ways of evading the law devised by the tax- 
payers for the purpose of correcting provisions, which would be 
actually unjust if they were enforced, lead to evading the just taxes 
as well as the unjust. 

Kentucky attempts to tax persons, not property. 

The General Property Tax as prescribed by law today in Ken- 
tucky is still primarily what it was in colonial times, a tax on person* 
in proportion to their estates. But the days when property was mainly 
tangible and the forms of ownership were simple and direct have 
passed away. Corporations, trust companies and other "artificial per- 
sons" have grown up, and the natural person, the man or the woman, 
may invest his or her "estate" in the shares or securities of such com- 
panies. Large estates are now extensively represented by paper evi- 
dences of ownership, by documents, which cover the tangible prop- 
erty, the title to which vests in the corporation or trust company, and 
also large amounts of intangible property. A man can easily conceal 
bis estate or large parts of it, or can remove it from the jurisdiction 
of the taxing power. Moreover, as our Kentucky tax law treats 
"artificial persons" exactly as it does the natural person, there is a 
general feeling that there is likely to be double taxation if the natural 
person returns all his estate. This feeling leads to concealment and 
evasion, which is justified in the taxpayer's mind by perfectly good 



REPORT OP THE SPECIAL TAX COMMISSION. 45 

reasoning. For example : A man invests ten thousand dollars in rail- 
road stock. He knows that the railroad is fully taxed upon its 
tangible and intangible property. He argues that his ten thousand 
dollars has been taxed when the railroad was taxed and that if he 
returns it as part of his own taxable property it will be taxed again, 
making two taxes on the same property. This argument is correct. 
But our law imposes this double taxation. Hence the taxpayer evades 
the law if he can. 

Double taxation. 

There is, moreover, a still more compelling reason than the mere 
feeling of injustice which drives the taxpayer to evade the law. If 
he returns his securities, stocks, bonds, notes and the like for taxa- 
tion, he must pay from one to one and a half per cent, in taxes thereon 
out of a return of from four to five per cent, in interest or dividends. 
If he pays the tax, the investment is unprofitable, and he is driven 
either to evade the tax by concealment and perjury or to take his 
money out of the State. 

Undervaluation. 

The habit of evasion thus engendered, leads also to undervalua- 
tions. When the aim of the law is to ascertain each man's estate, it 
becomes necessary to rely to a large extent upon his statement of what 
he owns. There are many honorable gentlemen who do not like to 
render a false statement even to a tax assessor. But there are also 
many others who are not so scrupulous. To protect himself, the 
honorable gentleman either refuses to make any statement, leaving it 
to the Assessor to do the "right thing" as between all the taxpayers, 
or resorts to the subterfuge of asserting that there is one "value" for 
purposes of taxation and another "value" for purpose of buying 
and selling. Corporations regularly take this position, both before 
the Board of Valuation and Assessment and in the courts. 

Property versus personal taxes. 

There is a simple remedy for many of these troubles, and that is 
to seek out all taxable property, and to tax it where it lies without 
particular regard to who owns it, and especially disregarding all in- 
direct ownerships. The aim should be not to tax each person in pro- 



46 REPORT OF THE SPECIAL TAX COMMISSION. 

portion to his estate but to tax property* (all things capable of pri- 
vate ownership) wherever found regardless of ownership. 

Illustration of the difference. 

To illustrate this difference of procedure, we may take the case 
of a factory manufacturing a patented article, widely advertised and 
extensively used. We will assume that the original founder incor- 
porated the business, and that he subsequently incorporated his es- 
tate, transferring to the latter company not only his shares of stock 
in this factory, but other property and enterprises, and that after his 
death his widow and children placed the stock of the family estate 
company in the hands of a trust company. 

The underlying property is some land, a factory building, soma 
patent rights, a lot of "good will" created by advertising and a value 
as a going concern with contracts and selling agreements of many 
kinds. This is all comparatively easy to find and to assess at the 
place where the factory is located, and if the company pays the taxes 
thereon the government has received its full dues. It is really un- 
necessary to go any further. The full taxes having been paid, it is of 
little concern to the taxing authorities who owns the property or who 
may have an indirect interest therein. 

Instead of stopping here, however, our laws, if literally enforced, 
would require the Assessor to search out the family estate company 
and assess to it the shares of stock in the factory, and still further 
to pursue the shares of the family estate company as property of the 
heirs in the hands of the trust company, the result being, if evasion 
is not practiced somewhere, triple taxation. As a matter of fact, of 
course, the law breaks down and all these complexities result merely 
in evasion, omission and undervaluation. The factory is assessed at 
a small fraction of the value of the land and building, the valuable 
patent rights are probably omitted, as are also the good will and the 
going value ; the shares of the family estate company are placed out- 
side the State or concealed, or possibly the heirs assume a residence 
in a foreign country and escape taxation on the shares. The govern- 
ment does not receive its dues, a lot of persons break the law in spirit, 
if not in the letter, and an atmosphere of lawlessness and moral turpi- 
tude is engendered. 



*It is admitted that the term "property" is a relative term and implies an owner 
and to that extent means much the same as "estate." But a usage has grown up 
in tax laws which makes the term almost concrete in character. 



CHAPTER II. 

REMEDIES FOR THE TWO MAIN DEFECTS IN 
THE PRESENT TAX SYSTEM. 

The defects restated. 

The two main defects in the Kentucky tax system as stated are : 
(1) that much property escapes; (2) that property that is assessed 
is very unequally assessed. 

The causes of these defects are clearly: 

(1) Too much dependence on the taxpayers' own statements; (2) 
unskilled, underpaid Assessors, who work under most unfavorable 
conditions, without proper tools, especially without maps, and with- 
out adequate supervision and instruction; (3) the absence of effective 
State agency for enforcing a uniform administration of the law. 

The remedies demanded are equally clear: 

(1) Without doing away with the taxpayers' statements, we must 
change the initiative. The government must take the initiative and 
not wait for the taxpayer. We must make it the duty of the Assessor 
to go after and find all the property, instead of merely hunting for tax- 
payers. If we put the property on the rolls, the owners will soon ap- 
pear. The Assessor must find all the property, with the help of the 
taxpayers and their statements if he can have that help, but find it. 

(2) We must secure skilled Assessors. We believe they should 
ultimately be under civil service rules. We must pay them enough to 
enable them to give all their time to the work. 

(3) We must equip these Assessors with proper tools, especially 
with good tax maps. 

(4) We must provide a central supervising body, a central tax 
commission, with power to supervise the Assessors, and whose duty it 
shall be to so direct the work of the Assessors, both by formulating 
rules of procedure and by fixing standard values for the guidance of 
the Assessors, that the roll shall be practically complete and perfect 
as soon as made. 

The constitutional provision. 

That the possible necessity of just such a step was foreseen by 
the framers of the Constitution is shown by the following provision 
inserted in that instrument: 



48 REPORT OF THE SPECIAL TAX COMMISSION. 

§104. Assessor— eligibility — office may be abolished. The General 
Assembly may abolish the office of Assessor and provide that the assess- 
ment of property shall be made by other officers; but it shall have power 
to re-establish the office of Assessor and prescribe his duties. No person 
shall be eligible to the office of Assessor two consecutive terms. 

Our recommendations. 

In accordance with this provision we have, in the statute which 
we have drawn, and which we submit herewith, provided: 

(1) That the office of County Assessor be abolished, but that the 
Assessors recently elected be taken into the new system as deputy tax 
commissioners for the counties in which they were elected and at the 
same rates of compensation as formerly provided for. 

(2) That hereafter all assessments be made under and by the 
authority of a permanent State Tax Commission, who, with their 
deputies, shall be the "other officers" referred to in the Constitution. 
This Commission is to perform other duties besides those here men- 
tioned. 

(3) That the State be divided into fifteen tax assessment districts 
of such size that the work of assessment in each will command the full 
time and attention of a competent man. 

(4) That there shall be in each assessment district a Deputy State 
Tax Commissioner with the title, for convenience, of "District Tax 
Commissioner." 

(5) The District Tax Commissioner shall make up the county 
rolls in each of the counties in his district. 

(6) The Fiscal Court in each county shall provide an adequate 
tax map of the county for the guidance of the District Tax Commis- 
sioner, and these maps shall be subject to the approval of the State 
Tax Commission. 

(7) The State Tax Commission shall prescribe the rules for the 
guidance of the Deputy Tax Commissioners, shall gather constantly 
through its deputies, and in other ways, data concerning values, and 
shall fix, whenever possible, in advance, standard values both for lands 
and for other classes of property. These standard values should be 
published and be subject to public criticism and review before being 
used, and before the rolls are made up. 

Expense of new system. 

We shall, in the Appendix, present an estimate of the cost of this 
administrative system. We believe it can be had without any in- 



REPORT OF THE SPECIAL TAX COMMISSION. 49 

crease in the present costs and that ultimately the costs will be re- 
duced. 

It is not expected that the bill herewith presented is complete as 
to all details. But it is expected that the permanent State Tax Com- 
mission will, from its experience in the future, be able to recommend 
to the Legislature from time to time whatever may be necessary in 
the future to perfect the system. 

The tax maps will involve an initial expense to the counties and 
the State of some size. But, once made, the cost of the annual as- 
sessments will be, in all years to come, materially reduced. Moreover, 
that initial cost will be more than covered in a very few years by the 
taxes on property which without them would continue to escape taxa- 
tion. 

Assessors just elected to serve out their term. 

We believe that it would hardly be fair to abolish the office of 
Assessor without caring for the present incumbents. It appears that 
the gentlemen who have just been elected to those offices should be 
allowed to serve out their terms.. 

That does not, however, necessitate delaying the whole plan for 
four years. The State Tax Commission can and should be created 
at once and should begin work at once. It should have supervision 
at once over the work of assessment, and should assume the other 
duties which are assigned to it in the bill we have prepared, including 
the making of the State assessments and the work of equalization. 

To serve as the means of communication between the permanent 
State Tax Commission and the County Deputy Tax Commissioners, 
and to superintend their work, there should be a District Tax Commis- 
sioner. We have for the present suggested that until the permanent 
system can go into force, one of the County Assessors in each district 
be made the District Tax Commissioner for the interim. The added 
expense during the interim period would not be great compared with 
the great benefits of improved assessments. 

I. THE STATE TAX COMMISSION. 

The experience of other States. 

A State Tax Commission for the supervision and control of the 
assessments is generally recognized as one of the essentials of a busi- 
ness-like tax administration. 



50 REPORT OF THE SPECIAL TAX COMMISSION. 

In the Appendix is a list of the States which now have such tax 
commissions or boards exercising similar powers, together with the 
composition and expenses of such commissions. 

The experience of other States seems to point to the following 
conclusions : 

(1) Bx-officio commissions are not a success. There have been 
conspicuous exceptions where an ex-officio board has for a time done 
brilliant work. 

(2) When such commissions fall into politics they become weak 
and ineffective. This is especially true when they become in any way 
subservient to any • particular business or financial interest ; and no 
less true when they represent any extreme radical faction. The tax 
man should be a fearless and untrammeled judge of what is right and 
just. 

(3) Elected boards are not a success, whether elected by districts 
or at large. The men really skilled in such work generally rise 
through the ranks of public servants and are not generally willing or 
financially able to submit to the uncertainties of a political campaign. 
The making of a popular campaign involves gathering a "following" 
and may result in friendly relations with some group or party, or 
"interest," a connection not desirable in a tax man. The tax man 
must be free from any entangling alliances of any sort. 

Successful boards. 

(4) The boards which have been most conspicuously and perma- 
nently successful have been non-partisan boards appointed by the 
Governor for long terms, the members retiring at different times, so 
that after the beginning no one Governor could appoint more than 
one member from his own party. This gives the Commission a high 
degree of independence of mind and action, which is almost a sine 
quo non for success. 

Such commissions elsewhere. 

The most conspicuous examples of this type of commission are 
those of Wisconsin, Minnesota and Ohio, though by no means the 
only ones. The Wisconsin commission is generally regarded as a 
model. We have followed that law largely in the proposed statute. 



REPORT OF THE SPECIAL TAX COMMISSION. 51 

Our proposal. 

We have proposed a non-partisan commission of three members 
to be appointed by the Governor subject to the approval of the Senate 
on the basis of knowledge and experience in taxation. The regular 
term of office is to be four years, one member retiring every two years. 
The members are to be eligible for reappointment and removable only 
for cause. We believe that the salary should be as high as that of 
any State officer, and have suggested five thousand dollars. 

We believe that service on such a commission will be attractive to 
the best equipped men in the State and will command the highest type 
of ability. 

The duties of the commission. 

The duties of this Commission, as outlined in detail in the pro- 
posed statute, are in general : 

To supervise the whole administration of the tax system from top 
to bottom. To that end, it is to examine candidates for appointment 
as District Tax Commissioners and recommend an eligible list to the 
Governor for appointment. It is also to formulate rules for the guid- 
ance of the deputies and to supervise the work of assessment in every 
detail. It is to study and investigate values and may, when it deems 
it wise, fix standard values which the assessing officers must follow. 
An explanation of what is meant by standard values will be found in 
another part of this report. 

It is to see to it that all the requirements of the law are executed. 

It is also to take over the work of the old State Board of Equaliza- 
tion and of the State Board of Valuation and Assessment and the 
assessment work of the Railroad Commission. 

II. THE ASSESSMENT DISTRICTS. 

Small assessment districts bad. 

One of the most manifest weaknesses in the present system is the 
small size of the assessment districts. Each of the one hundred and 
twenty counties is a separate district, no matter how small it is. This 
makes the Assessor's office a small affair, duplicates expenses and 
leads to waste and inefficiency. 

Advantages of large districts. 

The assessment districts should be large enough to warrant paying 
a salary sufficient to make it possible for a good man to give all his 



62 REPORT OF THE SPECIAL TAX COMMISSION. 

time throughout the year to the work. Although the actual writing 
of the roll takes but four months, there is a very large mass of work 
that should be done preparatory thereto. Taxable properties should 
be inspected, values ascertained, records compiled, maps corrected and 
revised, titles revised and complaints investigated. The assessment 
districts should also contain property enough to give the Assessor 
ample employment. County lines cannot be cut, but counties can be 
combined. 

Fifteen districts proposed. 

We believe that fifteen districts will be about the right number for 
the following reasons: The total assessment roll of the State, ex- 
clusive of assessments made by the State Board, is about eight hun- 
dred and fifty million dollars. The true value is about sixteen hundred 
million dollars. Fifteen districts would give an average of a little 
over one hundred and six million dollars of. property in each. But 
the districts cannot be made uniform in size because counties cannot 
be divided, and there is one county, Jefferson, which contains property 
far in excess of the average. Jefferson county has nearly two hun- 
dred million dollars assessed value, and much larger in true value. 
This will cut down the average for the other districts. But the fifteen 
districts suggested are large enough. 

Principles guiding in making the districts. 

The ascertainment of the best districting is a task requiring more 
information concerning the true value of property and certain other 
matters than is now available. Each district should be so laid out 
that the lands therein are approximately of the same general char- 
acter. The lines of travel and communication should be studied so 
that the District Tax Commissioner can readily pass from one part of 
his district to another. 

All this is a task for the permanent State Tax Commission to solve 
ultimately. Moreover, with the shifting of population and wealth, it 
will be necessary to change the districts from time to time. We have, 
therefore, provided that the Commission shall from time to time rec- 
ommend to the Legislature what the boundaries of the districts 
should be. 

The districts we recommend for the beginning have been built 
up by combining the present thirty-four judicial districts in such a 
way as to make fifteen. 



REPORT OF THE SPECIAL TAX COMMISSION. 53 

Since it is possible for the court and its officers, and for witnesses 
and litigants to pass readily from one part of a judicial district to 
another, it should be equally easy for the District Tax Commissioner 
and his deputies to get about. 

These districts will serve until the State be redistricted by the 
Legislature under advice of the permanent State Commission. 

District No. 1 — To contain the following counties: Fulton, Hickman, 
Carlisle, Ballard, Graves, Marshall and McCracken. 

District No. 2 — Calloway, Trigg, Christian, Lyon, Livingston, Critten- 
den, Caldwell and Hopkins. 

District No. 3 — Union, Henderson and Webster. 

District No. A — Daviess, Ohio, McLean, Hancock, Grayson, Brecken- 
ridge, Meade and Hardin. 

Ditsrict No. 5 — Simpson, Todd, Logan, Muhlenberg, Allen, Warren, 
Butler and Edmonson. 

District No. 6 — Barren, Hart, Larue, Nelson, Bullitt, Green, Taylor, 
Marion, Washington, Adair, Russell, Cumberland, Monroe, Metcalf and 
Casey. 

District No. 7 — Spencer, Shelby, Anderson, Oldham, Trimble and 
Henry. 

District No. 8 — Mercer, Boyle, Lincoln, Garrard, Clark, Powell, Madi- 
son and Jessamine. 

District No. 9 — Franklin, Woodford, Scott, Bourbon and Fayette. 

District No. 10 — Boone, Carroll, Gallatin, Grant, Owen, Kenton and 
Campbell. 

District No. 11 — Pendleton, Harrison, Nicholas, Robertson, Bracken, 
Mason and Fleming. 

District No. 12 — Greenup, Lewis, Boyd, Bath, Montgomery, Rowan, 
Menefee, Carter, Elliott, Lawrence and Morgan. 

District No. 13 — Breathitt, Lee, Wolfe, Estill, Johnson, Martin, Pike, 
Knott, Magoffin, Floyd, Leslie, Letcher, Owsley and Perry. 

District No. 14 — Jefferson. 

District No. 15 — Bell, Harlan, Jackson, Laurel, Clay, Rockcastle, Clin- 
ton, Pulaski, Wayne, Knox, Whitley and McCreary. 

III. THE DISTRICT TAX COMMISSIONER. 

Proposed method of appointment. 

We have proposed that the District Tax Commissioners shall ulti- 
mately be appointed under civil service methods and shall hold office 
for four years and be eligible for reappointment. We should have 
preferred to recommend that they be appointed for life or during good 
behavior. But the Constitution does not permit that. 



54 REPORT OP THE SPECIAL TAX COMMISSION. 

We believe this to be the ideal and most practical method. It 
will insure, as nearly as may be, skill, experience and impartiality. It 
will enable the Assessor to regard this work as a true profession and 
a life career. It will make it worth while for young men to study and 
prepare themselves for such work, because it offers a definite reward 
for success. It takes the office out of politics and gives the incumbent 
an independence and freedom for right judgment that is very neces- 
sary. 

i 
The plan not untried. 

This plan of selecting Assessors has been tried with marked suc- 
cess in some large cities. Although, so far as we know, it has never 
been tried in any State for general assessment purposes, yet there is 
no reason that we can discover why it should not be a marked suc- 
cess in this State. We note with interest that it goes into effect in 
Ohio in January next. 

The Assessor's office not a political office. 

The Assessor's office is in no sense a political office. He can use 
his office for political purposes only by abuse of power and mal- 
feasance. Unlike some other offices, the work is highly technical 
in character, and fitness can be determined by an examination. 

Features to be preserved in any event. 

(1) The Assessor should be the legal deputy or agent of the State 
Tax Commission. Hence we make him a Deputy Tax Commissioner. 
This is necessary to preserve the integrity of the assessments. The 
courts frown upon divided authority in tax assessments, 

(2) The District Tax Commissioner should be eligible to succeed 
himself. If he is not legally a deputy of the Commission, this may 
not be possible under the peculiar wording of the Constitution. 

Compensation allowed. 

We have allowed for the compensation of the District Tax Com- 
missioner, for the payment of his deputies and for the ordinary sup- 
port and maintenance of his office, when the final plan is ultimately 
reached the same rates of compensation as are now allowed. We 
believe that with the economies which will result from the combination 
of counties into larger assessment districts and from the supervision 



REPORT OP THE SPECIAL TAX COMMISSION, 55 

of the work by the State Tax Commission that these sums will be 
ample and can soon be reduced. 

Salaries of District Tax Commissioners. 

We have recommended that the maximum salary for District Tax 
Commissioners be not in excess of three thousand dollars and the 
minimum not less than fifteen hundred dollars. The Commission is 
to fix the salaries of the District Tax Commissioners, and is also to 
determine the number of deputies for each and their compensation. It 
is to fix the allowance for office expenses. It is necessary to leave the 
Commission, at least in the beginning, a somewhat free hand in these 
matters, because if the assessments are brought up to true value, as they 
should be, the commissions allowed would raise more money than is 
needed. The unspent balances will revert to the State Treasury to 
the ultimate reduction of the State taxes. Moreover, the proper ad- 
justment of these salaries and expenses will depend upon many factors 
which cannot be accurately known until the great inequalities in as- 
sessments have been removed. 

Compensation of District Tax Commissioners during the ad interim 
period. 

It is clear that if, as we propose, some one of the County Assessors 
be raised to the position of District Tax Commissioner during the ad 
interim period, he should have proper compensation for the added du- 
ties. The amount of that compensation should be determined by the 
permanent Tax Commission. Attention is called to the fact that with 
an improved assessment this increase can be met from the percentages 
provided for. 

IV. TAX MAPS. 

The most important tool of the Assessor is his tax map. Sub- 
sidiary important tools are the field book, the transcript of the records 
of transfers, mortgages, etc., and a good card index of values, the 
data for the last being collected from real estate agents and others. 

The value of tax maps. 

We have reprinted in the Appendix of this report, in condensed 
form, two addresses, one by Mr. Edward L, Heydecker, Assistant 



56 REPORT OF THE SPECIAL TAX COMMISSION. 

Tax Commissioner, City of New York, and one by Mr. Sidney J. Smith, 
Chairman Board of Assessors, Town of Newcastle, Westchester, 
County, New York. These addresses show not only the importance 
of good maps, but how they can be prepared at the least possible ex- 
pense. 

Tax maps in existence. 

We have made some inquiry into the existence of such tax maps 
already, and of other maps which might be used as a basis for getting 
up tax maps. This inquiry has not been made exhaustively, because, 
after all, the proposed permanent State Tax Commission will have 
to go into the matter far more carefully than we can do. But we find 
the following: (1) A considerable portion of the western part of 
the State has been sectionized by the United States Land Survey. 
Where lands have thus been sectionized, tax maps can be very readily 
prepared. (2) Over one-half of the State has been covered by the 
Topographic Maps of the United States Geological Survey. These 
Topographic Maps can be enlarged and used as a basis. (3) Several 
counties have made or are making tax maps and the city of Louisville 
has an excellent set. (4) The unmapped portions are mostly in the 
Blue Grass region and in the west central part where all the counties 
are surely rich enough to bear a part of this initial expense for so 
great an ultimate saving. 

Expense of tax maps, how borne. 

We believe that the expense of these maps should be divided equally 
between the State and the counties. We recommend that the maps 
be made under the direction of the State Tax Commission as a safe- 
guard against extravagance. 

Maximum one dollar per hundred acres. 

Unless the lands are subdivided into very small lots, an allowance 
of one dollar per one hundred acres is the maximum, in our opinion, 
that the maps should cost, and where good basic maps already exist, 
the cost will be much less. 

Difficulties to be overcome. 

There will be several difficulties to be overcome in making these 
maps, but they are not insuperable. Some of these are : That the 
boundaries of the counties are very irregular and many of the county 



REPORT OF THE SPECIAL TAX COMMISSION. 57 

lines have not been surveyed and marked on the ground; that the 
original surveys in which the areas of farms are described in deeds 
are more or less inaccurate and sometimes exaggerate the actual areas. 
It is sufficient, however, that the maps be accurate only to the extent 
of showing all the lands, so that the assessments can be checked by 
the maps. 

V. RULES OF ASSESSMENT AND STANDARD VALUES. 

Uniform rules vs. guesswork. 

We are convinced that a very great gain in uniformity and equality 
of assessments can be made, if the assessors work under uniform 
rules. By this we mean practically mathematical methods of computing 
relative values. 

Uniform rules in cities. 

This idea has been most completely worked out for city lands and 
buildings and may be best illustrated in that connection. The import- 
ance of this idea is so great, that it has been commercialized and there 
are a number of firms which make it a business of selling their methods 
to cities and installing them. The cities have sometimes found it to 
their advantage to hire these experts to install such systems. One of 
these is known as the "Somers System." We do not believe that it 
is necessary to buy a system. We are satisfied that the permanent 
State Tax Commission can work out one that will be better adapted 
to our needs than any that can be imported. 

Illustrated by New York City system. 

We cite the New York City system here merely as an illustration. 
The following are extracts from the report of the Commissioners of 
Taxes and Assessments of the City of New York for 1912. 

Land value maps. 

There are in all 140 maps covering the entire City of New York. The 
maps are drawn with the streets clear of printed matter to allow for re- 
cording the value per front foot of normal lots 100 feet deep, which are 
not subject to corner influences. In the case of land in large tracts in 
suburban sections the value in dollars per acre is marked at a point near 
the centre of the tract. 

The figures in the streets represent the value per front foot of normal 
lots 100 feet deep, which are not subject to corner influence. 



58 REPORT OF THE SPECIAL TAX COMMISSION. 

Methods of arriving at land values. 

The Deputy Tax Commissioners are aided in their work by the de- 
partment, which furnishes all sales where the consideration is stated in 
the deed, including auction sales, and these sales are kept permanently 
on cards where they are open to the inspection of the deputies. These 
records are put at the disposal of the deputies in the most convenient form. 
In addition to the facts obtained from the records, the deputies are ex- 
pected to obtain from real estate brokers and others all the facts in rela- 
tion to sales and leases and rentals which can be obtained by careful in- 
quiry. As a rule, they are singularly successful in this, and frequently have 
recorded in their field books the actual prices paid for land, which are 
not supposed to be known to anyone other than the parties to the transac- 
tion. While asking prices can very rarely be regarded as the measure of 
value, they are nevertheless evidences of value, and asking prices are gen- 
erally recorded on the deputies' field books. 

From all this evidence of value the deputies determine the value of 
front feet on each street. The exhibition of the values on a map tends 
to correct inequalities and mistakes which might otherwise be made in 
their determination of the value of particular streets. When the values are 
shown on the map it is apparent that they must all bear a reasonable 
relation to each other. 

Rules for lots of varying depths. 

There are several rules or processes in use by property owners, real 
estate dealers and assessors throughout the city to assist in the determina- 
tion of values for different parts of lots. The oldest rule in present use 
was promulgated by Judge Murray Hoffman some forty or fifty years 
ago, and is generally known as the "Hoffman Rule." Originally it ap- 
pears to have been a simple deduction or declaration of the effect that the 
front half of a lot is worth two-thirds of the value of the full lot. The 
most elaborate tables based on this rule were published in the "Evening 
Mail" by its real estate editor, Mr. Henry Harmon Neill, some four or 
five years ago, and are careful calculations of proportions resulting from 
the application of a rule that, taking 100 feet as a basis or unit of depth, 
the value for the first 50 feet of this depth is 66^ per cent, of the whole. 
The calculation has been carried out to show the proportion of value for 
each foot in depth from 1 foot to 100 feet. 



REPORT OF THE SPECIAL TAX COMMISSION. 



59 



Hoffman-Neill Rule. 



Feet. Per cent. 

1 0676 

2 1014 

3 1268 

4 1520 

5 1732 

6 1929 

7 2112 

8 2282 

9 2443 

10 2598 

11 2748 

12 2893 

13 3033 

14 3168 

15 3298 

16 3424 

17 3547 

18 3667 

19 3784 

20 3899 

21 4012 

22 4123 

23 4232 

24 4339 

25 4444 



Feet. Per cent. 

26 4548 

27 4650 

28 4751 

29 4850 

30 4947 

31 5042 

32 5136 

33 5229 

34 - 5321 

35 5412 

36 5501 

37 5589 

38 5676 

39 5763 

40 5849 

41 5934 

42 6018 

43 6102 

44 6185 

45 6267 

46 6348 

47 6429 

48 6509 

49 6588 

50 6667 



Feet. Per cent. 

51 6745 

52 6822 

53 6899 

54 6975 

55 7051 

56 7126 

57 7201 

58 7275 

59 7348 

60 7420 

61 7492 

62 7563 

63..—-- 7634 

64 7704 

65 7774 

66 7843 

67 7912 

68 7981 

69 8049 

70 8117 

71 8185 

72 8251 

73 8317 

74 8383 

75 8449 



Feet. Per cent. 

76 8514 

77.... 8579 

78 8644 

79 8709 

80 . 8773 

81 8837 

82 8901 

83 8964 

84 9027 

85 9090 

86 9153 

87 9216 

88 9278 

89 9340 

90 9401 

91 9462 

92 9523 

93 9583 

94 9643 

95 9703 

96 9763 

97 9823 

98 9882 

99 9941 

100 10000 



In the City of New York streets are ordinarily two hundred feet apart, 
and before streets are opened the value of land is affected by the street 
plan already adopted or likely to be adopted. The normal unit is a lot 
100 feet deep. 

A convenient rule, in quite common u&e, for the determination of the 
value of lots of greater depth than 100 feet is as follows: 

For the first 25 feet beyond 100 feet add 9 per cent. 

For the second 25 feet beyond 100 feet add 8 per cent. 

For the third 25 feet beyond 100 feet add 7 per cent. 

For the fourth 25 feet beyond 100 feet add 6 per cent. 

FACTORS OF VALUE OF NEW BUILDINGS AND EXPLANATION 

OF LAND VALUE MAPS. 

For over twenty-five years the department has used factors of value 
of new buildings as a guide to the assessment of all buildings. These 
factors are based on the knowledge and experience of the Deputy Tax 
Commissioners and information obtained from builders and others of the 
exact cost of construction. They have been constantly subject to examina- 
tion and modification to meet changes in conditions. 



60 REPORT OF THE SPECIAL TAX COMMISSION. 

Architects usually compute the cost of buildings by multiplying the 
exact number of cubic feet of contents by an appropriate factor. It has 
been found easier for the department to ascertain the square feet of floor 
space of a building than the cubic feet of contents; hence the department 
uses the method of computing the value of a building by multiplying the 
square feet of floor surface by an appropriate factor instead of the number 
of feet of cubical contents. If the building to be appraised were a loft 
building six stories high and 50 by 90 feet in area, it might be appraised 
by either the square foot or the cubic foot rule. The height of such a 
building from the cellar floor to the roof would be about 80 feet. The 
square feet of space on each floor would be 4,500; the cubical contents 
would be 360,000 cubic feet. At 18 cents per cubic foot the cost of con- 
struction of the building would be $64,800. A six-story building, 50 by 
90 feet in area, would have 27,000 square feet of floor surface. If the 
building cost $64,800, the factor per square foot of floor space would be 
$2.40. 

Example. 

Cubic Foot Factor, 18 Cents. 
50 by 90 equals 4,500 square feet area one floor. 
4,500 by 80 equals 360,000 cubic feet contents. 
360,000 by 18 cents equals $64,800, cost of building. 

Square Foot Factor, $2.40. 
50 by 90 equals 4,500 square feet area one floor. 
4,500 by 6 equals 27,000 square feet floor surface. 
27,000 by $2.40 equals $64,800, cost of building. 

Depreciation. 

In assessing old buildings it is desirable to determine the factor of 
value because it facilitates comparison both by the deputy and by the 
Commissioners. An old tenement house, for example, might have been 
valued when new at $73,000, and now be so depreciated by age as to be 
worth only $52,200. If the factor which produces the value of $52,200 is 
$1 it appears at once that the assessed valuation has been reduced by about 
thirty per cent, for depreciation. 

Example. 

Tenement house, 100 feet front, 87 feet deep, 6 stories high. Building 
factor, when new, $1.40: 

100 by 87 equals 8,700 square feet area, one floor. 
8,700 by 6 equals 52,200 square feet floor surface. 
52,200 by $1.40 equals $73,000 cost when new. 
52,200 by $1 equals $52,200 assessed value. 
Depreciation for age, $20,800. 

It is almost universally true that an improved parcel of real estate 
is never worth more than its capitalized rental value until the land alone 



REPORT OF THE SPECIAL, TAX COMMISSION. 61 

exceeds in value this capitalized sum. For example, a dwelling house 25 
feet wide is erected on land worth $20,000, and the house costs $30,000. 
The gross rental is sufficient to justify the expenditure; as conditions 
change the land rises in value for other uses than for dwelling houses, but 
the rental remains stationary. The property, as a whole, is worth no more 
than $50,000; in course of time the land is worth $40,000. Still the property 
as a whole is worth no more than $50,000. The land rises to $50,000. Now 
the building adds practically nothing to the land value and should be as- 
sessed at approximately one year's rental. There are old office buildings 
in the city, from seven to ten stories high. The land today is worth much 
more than when the building was erected, but the aggregate value of the 
property is today no more than the net rental capitalized at 4 to 4^2 per 
cent. The building may be worth only 50 per cent, of its original cost 
of construction or less than that. The increase in land value adds nothing 
to the sielling value of the property as a whole, unless that increase is ac- 
companied by an increase in the rentals which may be obtained. As a 
rule, such increase in land value under these circumstances is not accom- 
panied by an increase in rental because tenants prefer more modern build- 
ings. This principle is applicable to nearly all classes of improvements, 
and it must always be borne in mind that a building is worth no more 
than the difference between the value of the land and the aggregate value 
of the property. 

Application of these ideas to Kentucky. 

This system is, of course, somewhat more elaborate than need be 
adopted in Kentucky, especially as to buildings. Yet the city assessor 
of Louisville has already adopted rules of much the same character 
as to lands, and is contemplating introducing the same system as to 
buildings. The essential thing is that even a poor rule is better than 
no rule. 

Extension of such rules to county property. Personal property. 

Again it may be urged that such rules can be worked out readily 
enough for city property but not for country property. In a sense, 
this is true. But what can be done for country property is the fixing 
of standard values. This idea has already been widely applied to 
certain classes of personal property. Thus in Nevada each year the 
assessors from all over the State assemble and agree upon the value 
per head of cattle, sheep and per unit of certain other things. When 
they go home they all use these values in making up their rolls. In the 
same way, grain, tobacco, cotton and other staples of trade can be 
graded. 



62 REPORT OP THE SPECIAL TAX COMMISSION. 

Same as to lands in the country. 

It is more difficult, perhaps, to apply this idea to lands, but it has 
been done. We believe that in many parts of Kentucky a classification 
of lands can be made, and that standard values per acre for each 
class can be fixed at least for certain counties. The lands of the Blue 
Grass region are a fairly definite group for example, and within that 
group more or less definite sub-classes as to fertility and value can be 
fixed. If first-class Blue Grass lands are worth $150 an acre, a second 
grade may be worth $100, and a third grade only $85. Land suitable 
for tobacco may be graded by kinds. Hemp lands, again, form a 
groap. Wood lots, marshy pasture lands, and other non-tillable lands 
are clearly separate groups. 

The gain in fixing standard values. 

If such standard values can be fixed and to the extent that they 
can be fixed, a clear gain in the direction of uniformity and equality 
is made. If other considerations than fertility, like distance from a 
railroad, the absence or existence of good pikes, and the like, enter 
in to affect values, these, too, can be allowed for in more or less defi- 
nite ways. If the assessor is directed to rate first-class corn land at 
$100 an acre, he will get all corn land on the same basis. He will not 
roughly guess that one piece of 40 acres is worth $2,500, and another 
of 25 acres is worth $4,000. 

Farm buildings. 

Farm buildings cannot be valued by the same rules that are applied 
to skyscrapers in New York. Nor can they be valued by any very 
strict rule. But some simple rules can be given the assessor for his 
guidance. In this connection, however, the worst feature in the past 
has been the lumping of the value of the improvements with the land 
values. 

Use of standard values permissive, not obligatory. 

We have, in the proposed statute, provided that the State Tax 
Commission may fix standard values for the guidance of Assessors, 
and we believe they will often exercise that prerogative. When they 
do so they should publish that fact, and the values, for public criti- 
cism and discussion. The aim of this is to do as much equalizing 
as possible before the roll is written up. Another gain is that it will 



REPORT OF THE SPECIAL TAX COMMISSION. 63 

give the public a real and not a merely fictitious opportunity to criti- 
cise the assessments. It will also give the Assessor a chance to show 
that his work is right. Neither of these things is possible today. 

Example of the use of standard values. 

Let us suppose that the Commission goes into Woodford county 
and announces that it proposes to recognize three grades of tillable 
lands in that county, the best grade is to be rated at $150, the second 
at $100, and the third at $85 per acre, woodlots, pasture and other 
non-tilled lands not to be counted in, but separately rated. After pub- 
lic discussion, however, the Commission may decide that $125, $100, 
and $85 are the more nearly representative rates. The Assessor then 
has merely to ascertain the correct acreage, which he finds from his 
maps, and multiply by the rate. If John Smith thinks he has been 
unfairly treated because Roberts, his neighbor, got off with a lighter 
assessment, the only questions that can arise are definite questions of 
fact. What is the acreage and in which class does the land belong? 
Tf the Assessor is right he will have no trouble in convincing Smith; 
if not, Smith or anybody else can easily show up the error. 

Approximate uniformity the aim. 

It may be urged that lands vary in value within narrow limits, and 
that by this plan some land worth, say $120, may get into a $125 
class, or might be graded down to the $100 class. This is urging a 
refinement in assessments which is altogether impracticable and un- 
necessary. Approximate uniformity is what must be the aim. As it 
is now with no rule and no standards, $85 land is often assessed at 
$75, and $150 land at $85, and even worse discrepancies occur. 

No abuses can arise. 

As all of this is permissive and discretionary with the Commis- 
sion, we feel that the details may be safely left to the Commission to 
work out. It is hard to imagine any abuse which could possibly arise 
in the exercise of this power. It all tends to publicity and more dis- 
cussion, and criticism of the work of the Assessors, which is the 
greatest possible safeguard. 



64 REPORT OF THE SPECIAL TAX COMMISSION. 

VI. SEPARATE ASSESSMENT OF LAND AND THE 

IMPROVEMENTS THEREON. 

Land and improvements. 

The proposed statute drafted by us provides that lands and the 
improvements thereon shall be separately valued and assessed. This 
is a very simple matter, but it has been shown by experience to be 
very effective in bringing about equality. With it goes the provision 
that land of the same quality and similarly situated shall take the 
same assessed value per acre or per foot. The last is the essence of 
tax equality. How can the Assessor, or an equalizer, or a dissatis- 
fied taxpayer know whether two given pieces of land of the same 
quality and like in situation, but bearing very different improvements, 
are assessed at the same rate when the land values and the improve- 
ments are jumbled together in one lump sum? 

Advantages of separate assessment. 

In one sense, this is simply clearing the records so that the mean- 
ing of the figures can be seen. But it is more than that, it forces the 
Assessor to work and to think more carefully. He will normally 
work out his land values first and equalize them, then go at the im- 
provements. Each gets considered by itself, and each by different 
modes of approach. 

Discovered in California in 1872, rediscovered in New York 
about twenty years ago, this simple device has everywhere proven 
its practical utility. 

VII. THE QUADRENNIAL ASSESSMENT OF REAL 

ESTATE. 

Real estate to be revalued once in four years only. 

We have provided in the proposed act that real estate shall be 
completely revalued and assessed but once in four years. In the in- 
tervening years, the roll shall be corrected and revised by entering 
the names of new owners, by removing improvements burned down 
or otherwise destroyed, and by adding new buildings, but the values, 
in general, shall be the same as those fixed at the time of the quadren- 
nial revaluation. We have provided, however, that the State Tax 
Commission may order a partial revaluation of real estate to be 
made in the intervening years, when, in its judgment, the changes in 
values require it. 



REPORT OF THE SPECIAL TAX COMMISSION. 65 

The purposes. 

The purposes of this are two: (1) to save the expense of an 
annual revision; (2) to make the valuation of lands a more im- 
portant and impressive event, thus giving it a prominence which will 
cause the work to be better done. 

Land values, except in some localities, do not change rapidly in 
Kentucky. Where they are so changing, the Commission can act. 
That being the case, to go all over the roll each year seems a waste 
of effort. Once in four years seems often enough to make a com- 
plete revision of land assessments. 

The saving. 

The saving that will be made will be mainly in the expense oi 
the local boards of supervisors and in the expense of inter-county 
equalization. In most counties, there would be little need of local 
equalization in the intervening years, and boards of supervisors need 
not be convened. The proper function of a board of supervisors is 
not the searching for property that has not been assessed, but the 
hearing of complaints of the taxpayers against the Assessor. There 
should be such a board of review. But its functions should be those 
of review, not of assessment. 

The positive gain that will be made by the change proposed will 
be that the valuation of lands can be made more thoroughly and on 
the basis of more careful and extended investigation. In the inter- 
vening years the records can be carefully and deliberately worked up, 
and when the time comes everything can be ready. 

This plan in Ohio. 

The quadrennial assessment of real estate has been a feature oi 
the Ohio tax system for some years. In fact, the interval between 
assessments used to be even longer than four years. It was gen- 
erally regarded as a feature of great merit. We noted with some 
surprise, therefore, that the Ohio Tax Commission has recently rec- 
ommended that the quadrennial assessment be abolished. 

The Ohio Commission in 1913 said: 

"Another object which the bill seeks to accomplish is the discon- 
tinuance of quadrennial reappraisement of real estate. It is believed 
that it will be generally acknowledged that at the present time the 
real estate in the State is on the tax duplicate at approximately its full 
value and is assessed with a fair degree of uniformity. Annual re- 



66 REPORT OF THE SPECIAL TAX COMMISSION. 

vision and readjustment on the basis of the 1910 appraisement of 
real property will, it is thought, not only obviate an enormous ex- 
pense to the taxpayers, but also accomplish and maintain uniformity 
in the assessment of real estate." 

The reasons for Ohio's change of heart. 

The reasons ascertained by a visit to Columbus are the follow- 
ing: The Ohio quadrennial was a very elaborate affair, involving 
a horde of special assessors, 3,415 in number, and special boards of 
review. The entire cost in 1910 was $1,777,958, and the cost for 
special boards of review alone contained in the above sum was 
$241,000. The Ohio quadrennial, also, seems to have fallen into 
peculiar and special election difficulties, of which the Commission 
complains. In short, the quadrennial there was the successor of the 
old decennial revaluation, for which, in the nature of things, complete 
new machinery had to be created each time. What they are trying 
to get away from is the cumbersome machinery and the expense. 

How our proposal differs. 

Our proposal is quite different from this. We propose to use the 
regular machinery of assessment for this purpose. In fact, our plan 
will make a reduction in cost, not an increase. By giving the regular 
force more time to get ready and collect data, we believe that in- 
stead of requiring more men, we can get along with an ultimate 
force smaller and not larger than that now used. 



CHAPTER III. 
LIMITING THETAX RATES. 

Raising assessments should not raise taxes. 

It requires but a moment's consideration to realize that if the 
assessed valuation of property he double and the tax rates remain 
the same the tax burden would be doubled. That would raise too 
much money. If the tax rates do not go down, the taxpayers will 
resist the raise of the assessments. We feel sure that the proposed 
change from valuation at a fraction of the true value to full cash 
value will be defeated, if there be not a tax limit law. 

The following citation from the 1912 report of the Ohio Tax 
Commission states the arguments and the experiences of that State 
very forcefully. 

"THE ONE PER CENT. TAX LIMIT ACT. 

"Legislation limiting the tax rate formed an important and very neces- 
sary part of the general plan of reform in the tax laws of the State inaug- 
urated in 1910. It was apparent to everyone who had given the subject 
any consideration that if all property was to be assessed at full value, it 
was imperative that the rates of taxation should be reduced. 

"Therefore, when tangible property was assessed at varying per- 
centages of full value, with a large proportion of the intangible property 
escaping lentirely, the tax rates in the State had varied from 1.4 per cent, 
to 6.7 per cent., with an average rate for the State of 2j4 per cent., and 
for the cities and villages of approximately 2>y 2 per cent., and it was recog- 
nized by all that to tax property, when assessed at its full value, at such 
rates would amount to confiscation, and that intangible property would 
entirely disappear from the tax duplicate. 

"Under our system of taxation, those who determined the rates of 
taxation to be levied in the counties, cities, villages, school districts and 
townships were also the tax spenders, and it was deemed advisable to fix 
a limit beyond which these officers could not go in levying taxes. It was 
also believed that with a low rate of taxation the amount of intangible 
property that would be returned would be greatly increased, and the work 
of assessing other kinds of property would be less difficult. 

"The law requiring the return of monies and credits for taxation had 
been so generally evaded in the State, the public had come to take it for 
granted that a 'tax that can be evaded will be evaded,' that where the 
incentive is strong enough, the benefit to self is large enough and the 



68 REPORT OP THE SPECIAL TAX COMMISSION. 

chance of being found out is small enough, false returns would always be 
made. 

"This Commission believes that the great majority of the people of 
the State are honest and willing to bear their fair proportion of the cost 
of government; that most of our citizens believe in that admonition of 
the Great Teacher, 'Pay to the Emperor what belongs to the Emperor 
and to God what belongs to God.'* 

"In 1910, accordingly, an act was passed to become effective January 
1, 1911, attempting to limit the tax rate. As the limitation provisions were 
not entirely clear and the administrative features were bad, the act was 
amended in 1911 and as such is now in force throughout the State. 

"This law provides four separate limitations upon the amount and rate 
per cent, of taxes that may be levied in any taxing district as follows, to-wit: 
" '1. The aggregate amount of taxes which may be levied upon 
the taxable property in any taxing district, including sinking fund and 
interest and levies for State, county, township, municipal, school and 
all other purposes in the year 1911, shall not exceed the aggregate 
amount of taxes levied in the year 1910; the aggregate levied in the 
year 1912 may exceed the aggregate in 1910 by not more than 6 per 
cent.; the aggregate in the year 1913 may exceed the aggregate in 
the year 1910 by not more than 9 per cent., and the aggregate in the 
year 1914, or any year thereafter, may exceed the aggregate in 1910 
by not more than 12 per cent.f 

" '2. If to produce any such aggregate it will require a greater 
levy than 10 mills, then only such amount may be levied as will be 
produced by the levy of a maximum rate of 10 mills on each dollar 
of the tax valuation of the taxable property of any taxing district, 
exclusive of levies for interest and sinking fund purposes, for emer- 
gencies, and such additional levies as may be authorized by a vote of 
the people. 

"'3. Each taxing board or authority is limited as follows: 
"'For all county purposes, not to exceed 3 mills; 
"'For all township purposes, not to exceed 2 mills; 
"'For all city or village purposes, not to exceed 5 mills; 
" 'For all local school purposes, not to exceed 5 mills. 
" '4. The aggregate rate which may be levied in any taxing dis- 
trict for all purposes, including additional levies authorized by a vote 
of the people, shall not, in any 'event, exceed 15 mills.' 

"The maximum rates in the third limitation are exclusive of levies 
for interest and sinking fund and exclusive of any special levy provided 
for by a vote of the electors, special assessments, levies for road taxes 
that may be worked out by the taxpayers, and levies and assessments in 
special districts created for road or ditch improvements. The evident pur- 
pose of the maximum rates in the third limitation is to prevent one taxing 



*Must be an Ohioan version for "Render therefore unto Caesar the things that 
arc Caesar's, and unto God the things that are Cod's." Math. 22:21. 
tThis limit proved impractical and has since been repealed. 



REPORT OF THE SPECIAL TAX COMMISSION. 69 

board or authority from taking advantage of reduced levies made by other 
taxing boards or authorities and increasing its levy so as to bring the 
aggregate to the maximum limit of 10 mills. 

"The county commissioners of each county, the Council of each 
municipal corporation, the trustees of each township, each board of educa- 
tion and all other boards and officers authorized by law to levy taxes within 
a county, except taxes for State purposes, are required to submit to the 
county auditor an annual budget, setting forth, in itemized form, an esti- 
mate of the amount of money needed for their wants for the incoming 
year and for each month thereof. The items to be set out in such budget 
in detail are specified in the statute. A budget commission for the annual 
adjustment of the rates of taxation is created, composed of the county 
auditor, the mayor of the largest municipality in the county and the prose- 
cuting attorney of the county. It is made the duty of such budget com- 
mission to adjust the various amounts to be raised by taxation so that 
the total amount shall not exceed in any taxing district the sum authorized 
to be levied therein. In making such adjustment the commissioners may 
reduce any or all items in any budget, but may not increase the total, and 
no greater amount may be appropriated or expended by any taxing dis- 
trict than the amount fixed by the budget commissioners, exclusive of 
receipts and balances. Unexpended appropriations of balances remaining 
over at the end of the year revert to the general fund. When the com- 
missioners have completed their work, the county auditor is required to 
ascertain the rate of taxes necessary to be levied in each taxing district. 
Provision is made for emergency levies to provide for casualties." 

Tax limit law to take effect 1916. 

We have prepared a tax limit law embracing the feasible features 
of the Ohio law and omitting the features that have not proved feasi- 
ble. The limits set therein are $1.00 per hundred dollars of assessed 
value to cover State, county, district and all other taxes, exclusive 
of bond taxes and taxes imposed by special vote of the people, and 
an absolute limit of $1.50 including these. It will not be feasible to 
enforce these limits until the State tax rate can be reduced. 

It will necessarily take some time for the permanent Tax Commis- 
sion to raise the valuation of property to its full value. 

The practical way will be to reduce the State tax rate for the 
first year after' the passage of the main tax bill to, say, 40 cents, and 
in the second year to, say, 30 cents, and then to put into effect the 
full tax limit bill. 



CHAPTER IV. 
THE TAXATION OF MONEY AND CREDITS. 

In his preliminary report to the Commission Professor Plehn 
made the following statement with regard to the proposed Constitu- 
tional amendment: 

The present constitutional provision. 

"The Constitution at present provides that all property, unless 
specifically exempt, regardless of its kind or of its ownership, must 
be assessed and taxed in the same manner, and on the basis of its 
actual value in money. 

Provision a dead letter. 

"This is a provision that has never been carried out literally, 
which cannot be carried out in practice, and which should not, even 
if it could be, be enforced. In compliance with the dictates of this 
Constitutional provision the statutes provide for the taxation of 
"bonds, notes secured by mortgages, other notes, accounts, cash on 
hand, cash on deposit in banks, cash on deposit with other corpora- 
tions, cash on deposit with individuals, all other credits or money at 
interest, stock in joint stock companies or associations, and stock 
in foreign corporations." The grand total of all of these as assessed 
in 1912 was $83,147,772, or less than 10% of the total roll, which 
was $840,479,194. 

"This $83,147,772 is but a very small fraction of the total of these 
items actually owned by Kentucky taxpayers. The bank reports show 
deposits alone of $123,000,000, of which only $12,847,868, or a little 
ever 10%, are returned for taxation. 

Why money is concealed. 

"The fact is, that a man cannot keep his money on deposit in a 
savings bank if, out of the 3% interest received, he has to pay 2% 
in taxes. Hence he either returns a false statement (perjury com- 
mitted) or withdraws his money and sends it out of the State. Again, 



REPORT OF THE SPECIAL TAX COMMISSION. 71 

bonds safe enough for a sound investment yield only 4 or 4^% inter- 
est; take 2% from that for taxes and the yield is too low. An honest 
taxpayer cannot invest in these desirable securities ; one willing to 
perjure himself does not return them if he owns them. Only under 
exceptional circumstances are they returned and taxed. 

Mortgages can be found. 

"Mortgages are, or at least can be, more effectively reached for 
purposes of taxation, because they are recorded. There are nearly 
$26,000,000 of these taxed. Every cent of this is double taxation. 
The land is taxed and then the mortgages which stand for and rep- 
resent a part of the value of the land are also taxed. But worse still, 
the double tax does not fall upon the lender, at whom it is aimed. 
He shifts it to the borrower. So in the end the land owner is taxed 
not only upon his "land but also upon money he borrows on it. 

Capital shy of Kentucky. 

"Monied capital will not come into Kentucky unless it can earn 
as much here as elsewhere, and to do that, if it comes, it must evade 
or shift the taxes. That it does not come as freely as it should is 
shown by a study of the amount of bank capital, deposits and the 
rates of interest. 

The law discriminates. 

"Moreover, in practice, the law discriminates against money ana 
credits when it is found. Money, in the nature of things, is assessed 
at 100 cents on the dollar, land at an average of 50 cents on the dol- 
lar. Under a strict interpretation of the law the State Board of 
Equalization must, if it raises the valuation of a county, raise the 
valuation of money as well as other property in that county, and we 
have the anomaly of money assessed at more than 100 cents on the 
dollar. 

No leniency to the money lender proposed. 

"To change this would not be offering any leniency to the money 
lenders, who, as a matter of fact, are not taxed. Not to change it 
means that all branches of the government are losing revenues. If 
the Constitutional amendment be adopted, the Legislature can then 
adopt what is sometimes called the Connecticut system, which is to 
charge a small registration tax on bonds, mortgages and other credits 



72 REPORT OF THE SPECIAL TAX COMMISSION. 

in place of the vain attempt to tax these things as property, in the 
same manner as other property. The Connecticut system works and 
raises revenue; the Kentucky system does not. 

The proposed amendment. 

"The Constitutional amendment now before the people proposes 
to remedy this by permitting the Legislature to "classify property for 
purposes of taxation," and to apply different methods of taxation to 
different classes. The old provisions as to uniformity are to apply 
within each class. 

"The Tax Commission has, in its preliminary report, already 
pointed out that this amendment is in accord with the most advanced 
States. 

"I have referred here only to the classification of money and 
cash items for special treatment. That is because, under another 
provision of your Constitution, which permits special methods to be 
applied for taxes 'based on income, licenses or franchises' you have 
already made a virtual classification of railroads and other public 
utilities and banks, and you are in a way to achieve excellent results 
thereby. 

"While there are a great many other equally serious evils in your 
tax system, especially in the work of local County Assessors, which 
can be remedied by legislative action without the passage of this Con- 
stitutional amendment, it is certain that you will never be able to 
reach money and credits effectively without untying the hands of 
the Legislature, at least to this limited extent. 

Exemption of public bonds. 

"The proposed Constitutional amendment also provides for the 
exemption from taxation of State, county and municipal bonds of 
this State. This exception cannot, of course, be retroactive and will 
apply to bonds issued in the future. It will save the people money 
by reducing the rate of interest on such bonds, and will enable Ken- 
tucky people to invest in their own bonds and thus keep the interest 
money at home. As it is now, you are paying foreigners a higher 
rate of interest than you need to, because the bonds are "taxable," 
but inasmuch as they are not taxed you get nothing back. It is easier 
to keep the money in the treasury in the first instance than to pay 
ii out in interest and then to try to get it back again by taxation." 



REPORT OF THE SPECIAL TAX COMMISSION. 73 

The Massachusetts commission of 1908. 

In 1908 a Tax Commission in Massachusetts issued a report, going 
exhaustively into the subject of the taxation of money and credits. 
The report has been regarded as a masterpiece. In 1910 the Minne- 
sota Tax Commission* took that report and rewrote part of it, revising 
it, as it said, to "meet the conditions as they exist in Minnesota. 
That revision so closely fits the conditions as they exist in Kentuck) 
today that we in turn have adopted the statement in the main. We 
have revised it somewhat to meet special Kentucky conditions and 
the views of the Commission. We have also condensed it. This is 
justified on the ground that it adds to our own conclusions the weight 
of authority of two of the most distinguished tax commissions in 
the country. Both of these commissions contained members who 
have given a lifetime to the study of taxation. 

The law requires all property to be assessed. 

Complying with this plain mandate of the Constitution cited above 
laws have been enacted and still remain upon our statute book re- 
quiring all property to be assessed and taxed at its full and true value 
in money. The law makes no distinction between productive and 
non-productive property. A book account upon which interest is 
rarely charged is taxed upon the same basis as a gilt-edge interest- 
bearing note, the family Bible on the same basis as an iron mine, 
and the family cook stove on the same basis as a street railway. This 
method of raising revenue has long been known as the general prop- 
erty tax. 

The term general property tax means that all kinds of property 
shall be taxed in substantially the same way for all purposes, State 
and local. 

In practical operation works injustice. 

It is claimed by its advocates that the general property tax is 
peculiarly American and democratic and it is generally supposed to 
be a method which, if fully carried out, would oblige every man to 
contribute to the support of government in proportion to his ability 
to pay. But as a matter of fact, in practical operation the system is 
neither American, democratic nor just. It is now quite generally ad- 
mitted by the great majority of people who are well informed upon 
the subject that however excellent the intent of the law the practical 



74 REPORT OF THE SPECIAL TAX COMMISSION. 

result has never been that all citizens do contribute in proportion to 
their ability. 

The general property tax was once in as nearly universal use in 
Europe as it is in the United States today. It was brought to the 
colonies by the early settlers and has been scattered by their descend- 
ants broadcast over the entire Union. The pioneers naturally and 
almost inevitably introduced into new territory the system in vogue 
in the States whence they came. 

Abandoned in England more than a century ago. 

In England, as in most other countries of Europe, the principal 
form of direct taxation was long a general levy upon property. In 
the seventeenth century this tax was known as the subsidy, and in 
practical operation produced the same results as followed its intro- 
duction in the New World. Personal property always managed to 
escape taxation in whole or in part, so that complaints about the in- 
equality and injustice of the system were almost as common as they 
are in Kentucky in our own time. In 1592 one writer stated that 
not more than five men in London were assessed upon goods exceed- 
ing £200, and in 1601 Sir Walter Raleigh complained that "The 
poor man pays as much as the rich." About the middle of the seven- 
teenth century the subsidy became so unsatisfactory that it was re- 
placed by a new tax, known as the monthly assessment, which was, 
however, but the same thing under another name. The immediate 
result of the change was a somewhat more complete assessment of 
property; but before long personalty began to evade taxation, as 
before, so that in 1692 the monthly assessment was abolished, and 
replaced by a new tax designed to reach the true yearly value of all 
lands, tenements, offices and personal estates. This new tax was but 
another property tax in a somewhat different form and it soon fared 
as hadly as its predecessors. During the eighteenth century personal 
property disappeared from the assessment rolls as rapidly as ever 
before, so that by 1798 over nine-tenths of the levy fell upon real 
estate and less than one-tenth upon offices and personal estate. By 
this time, in fact, the tax had generally come to be known as the 
"land tax." In some towns, we are told, the whole t2< was assessed 
upon lands and houses, and personal estates wholly escaped. In 1798 
an act was passed by which the land tax became virtually a fixed 
charge upon the land, and since that time un+il 1909 no further at- 



REPORT OF THE SPECIAL TAX COMMISSION. 75 

tempt has been made in England to levy a general property tax. The 
national revenues, until the adoption of the budget in 1909, have 
been derived from an income tax, taxes on inheritances and the usual 
indirect taxes ; while local revenues have been drawn chiefly from a 
tax levied upon occupiers of land, houses and trade premises. 

1 
Retained in very few European countries. 

In most of the other countries of Europe the result has been the 
same. In nearly all of them the general property tax has been tried 
and found wanting, and today it is employed as a principal source 
of revenue in the cantons of Switzerland only, where, however, it is 
usually supplemented by taxes on income. In Holland property is 
still taxed, but at a moderate rate and conjointly with a tax upon 
income. In Prussia and some other German States a very light prop- 
erty tax is imposed, supplementary to a general tax upon income; 
but the rate is exceedingly low — in Prussia only one-twentieth of one 
per cent. — so that the tax is neither an appreciable burden upon tax- 
payers nor an important source of revenue. 

It appears, therefore, that the general property tax is not an Amer- 
ican invention, but a form of taxation once common in Europe and 
now almost obsolete. Modern tax systems are based upon the prin- 
ciple that it is necessary to discriminate between various classes of 
property and business and to employ different methods and rates of 
taxation in dealing with them. Our American States and some of the 
Swiss cantons stand substantially alone in their effort to draw rev- 
enue from a general assessment upon all classes of property at a 
uniform rate. 

• ' vr ■.'"■-.. '. r~ '■■■ ■ 7-? ' 

Found in few ultra-democratic countries. 

It is equally erroneous to call the general property tax a demo- 
cratic form of taxation. It is not found in such ultra-democratic 
communities as the Australasian States ; nor, with the exception of 
Switzerland, is it found in those countries of Europe in which demo- 
cratic ideas have taken deepest root. It was brought to America 
from England in the seventeenth century, when democracy existed 
neither in the mother country nor in the colonies, and has been 
fastened upon us rather by historical accident than because of its 
inherently democratic qualities. 



76 REPORT OP THE SPECIAL TAX COMMISSION. 

A dismal failure as applied to money and credit. 

The experience of our American States with the general property 
tax has been at all points similar to the experience of Europe. From 
earliest times to the present there has been nothing but a succession 
of compliants that personal property, particularly property of an in- 
tangible character, has escaped its fair share of the burden of taxa- 
tion. In our own State, as in others, the tax laws are full of evidence 
to this effect, and during the last fifty years a mass of statistics has 
been collected which now places the matter beyond possible doubt. 
Many, if not most of our States, have appointed commissions to study 
the operation of their tax laws and devise methods of improving them. 
The reports of these commissions show wide divergence of opinion 
concerning the remedies to be adopted, but they are substantially 
unanimous upon one point — that in the taxation of personal property 
the general property tax has been a dismal failure. 

I 
The general property tax becomes a tax on real estate. 

The first fact to which attention should be called is that under the 
existing system personal property tends to form a constantly decreas- 
ing proportion of the total property assessed for taxation. It is gen- 
erally admitted that under modern conditions the amount of personal 
property in existence always equals and frequently exceeds the 
amount of real property. In a State like Massachusetts or New York 
some would have it that the amount of personal property is two or 
three times as large as the amount of real property; whatever the 
exact proportion may be, it is certain that it cannot <be less than, and 
probably greatly exceeds, the amount of real property. During the 
nineteenth century it is certain that the increase of personal property 
was particularly rapid; yet the statistics covering this period show 
that this class of property has usually formed a decreasing propor- 
tion of the total assessment. 

Census statistics. 

The United States census presents statistics which are of interest 
in this connection. In 1850 it appears that the real property subject 
to taxation in all the States was assessed at $3,899,000,000 and the 
personal property was assessed at $2,125,000,000. In 1902, however, 
real property was assessed at $26,415,000,000 and personal property 
at $8,923,000,000. It will be observed that in 1902 the assessed value 



REPORT OP THE SPECIAL TAX COMMISSION. 77 

of real property was six or seven times as large as in 1850, while the 
assessed value of personal property was a little more than four times 
as large. These figures apply to the whole country; if we select data 
for those States in which the amount of personal property is prob- 
ably greatest the result is still more striking. In the State of New 
York in the year 1850 real property was assessed at $564,649,000 and 
personal property at $150,720,000. In 1902 real property was as- 
sessed at $5,297,000,000, while personalty was assessed at $672,149,000. 
In other words, the assessed value of real property increased nearly 
ten-fold during the half century covered by the census figures, while 
the increase of personalty was but little more than four-fold. 

In 1850 nearly one-fourth of the total assessment fell upon per- 
sonal property, and in 1902 a little more than one-eighth. If we turn 
from New York to California, we learn from a recent report of a 
special commission that in 1860 personal property constituted 46 per 
cent, of the property assessed for taxation, that in 1880 it constituted 
26 per cent, and in 1905 but 17 per cent. 

Burden always falls upon tangible property. 

More serious than the widespread evasion of taxation which these 
figures indicate is the fact that the taxes actually collected from per- 
sonal property fall upon the taxpayers without the slightest approach 
to equality and uniformity. Such tangible things as merchandise, 
machinery, live stock and personal effects can be found by the As- 
sessors and taxed with some degree of success ; but intangible prop- 
erty, consisting of money, credits and securities, can readily be con- 
cealed and eludes the most vigilant search. The laws of the various 
States provide more or less rigorous and inquisitorial methods of 
reaching personal estates ; but the execution of these laws is intrusted 
to local assessors, who are controlled politically by the very persons 
whom they are expected to assess. The result is that strict enforce- 
ment of the law is seldom tolerated and the assessment of intangible 
property is in the highest degree unequal and uncertain. 

Taxes on money and credit paid by the helpless, not by the rich. 

The situation is made worse by the fact that the local tax rates 
throughout the country are so high that they take from the holder 
of good securities an excessive proportion of his income. In a ma- 
jority of our villages and cities the tax rate runs from lj^ per cent. 



78 REPORT OF THE SPECIAL TAX COMMISSION. 

upward. Intangible personal property, if returned for taxation, is 
often valued at its true cash value, and it is clear that such rates may 
take from the holder one-third or one-half of his income. Under 
such circumstances few persons can or will make returns of their 
personal estates ; and the usual result is that this property is taxed, il 
taxed at all, by the method of arbitrary estimate. When returns are 
made they usually come from trustees and executors of small estates, 
who cannot easily evade the law and have less inducement to do so. 
Thus it comes about that the tax on personal property bears with 
exceptional severity upon widows and orphans, the most helpless class 
in the community, and is most easily evaded by the "rich and power- 
ful, who can best afford to pay for it. These conditions are not 
peculiar to Kentucky; they are universal in all States having similar 
laws ; and among students of American taxation it has become a mere 
truism that our present .taxes, upon personal property actually fall 
upon the taxpayers in inverse proportion to their ability to pay. 
Where personal property, particularly money and credit, is greatest, 
it contributes least to the support of public charges ; and among indi- 
vidual taxpayers the amount which each one pays generally stands 
in inverse proportion to the amount of personal property which he 
owns. This is now, and always has been, the result of attempting 
to tax all property, real and personal, at a uniform rate. 

Places a premium on dishonesty. 

In order to enforce the taxation of personal property the laws of 
practically all the States require taxpayers to make returns to the 
Assessors under oath. These laws are frequently a dead letter and 
very few such returns are actually secured. But in many States 
drastic efforts have been made to enforce the complete disclosure of 
personal property under oath, with the result that the laws have pro- 
duced more perjury than revenue. The reports of State tax commis- 
sions are full of testimony to this effect. In them we read that exist- 
ing laws put a penalty upon honesty and a premium upon perjury 
that they are educating people in the practice of making false oaths ; 
and that a high court in one State has decided that "perjury in con- 
nection with a man's tax list does not affect his general credibility 
under oath." 



REPORT OF THE SPECIAL TAX COMMISSION. 79 

Drastic laws to secure disclosures have always failed. 

One of the most drastic laws on any statute book was the former 
law of Ohio, since much softened. The Kentucky law is a good sec- 
ond to that of Ohio for the severity of its language. If any law could 
compel the owners of intangible property to make a return of their 
holdings and pay a tax amounting to one-third or one-half of the 
income therefrom, it would seem that the old tax law of Ohio could 
compel them to do so. For many years that State required all tax- 
payers to make a return of their personal property "according to its 
value in money," and this statement had to be made under oath. But, 
besides that, the law authorized any county auditor to summon a 
recalcitrant citizen before a judge of the probate court, and made 
it the duty of such judge to punish the citizen for contempt 
if he refused to answer any question which the auditor might ask 
concerning his personal property subject to taxation. Nor was this 
all. The auditor might summon any other person, including the 
cashier of any bank, whom he might suppose to have knowledge of 
any taxpayer's affairs, and might compel him to testify under oath. 
Such an investigation might extend back over a period of five years ; 
and the law provided that in case of proved evasion or false state- 
ment five years' back taxes might be collected, with an addition of 
50 per cent, as a penalty. When we remember that the average tax 
rate in Ohio until very recently was 2 T / 2 per cent, of the capital value 
of taxable property it will seem that, with the penalty included, the 
amount that might be recovered from a man who evaded taxes for a 
period of five years amounted to no less than 18.75 per cent, of the 
entire value of his property. 

Stringent law ineffective. 

Under such a law it was discovered twenty-five years ago that 
the assessment of personal property was decreasing not only rela- 
tively, but absolutely. In 1887 the Governor of Ohio sent to the 
Legislature a special message dealing with the question of taxation. 
"Personal property," he said, "is valued all the way from full value 
down to nothing. In fact, the great majority of the personal prop- 
erty of the State was not returned, but entirely and fraudulently 
withheld from taxation. So far as personal property is concerned the 
fault is chiefly with the people who list their property for taxation. 
The idea seems largely to prevail that there is injustice and inequality 



80 REPORT OF THE SPECIAL TAX COMMISSION. 

in taxation and that there is no harm in cheating the State, although 
to do so a false return must be made and perjury committed. This 
offense against the State and good morals is too frequently com- 
mitted by men of wealth and reputed high character and of corre- 
sponding position in society." To remedy the conditions thus dis- 
closed the Legislature extended to all parts of the State a device 
which had been tried previously in a few counties. It was provided 
that the county officials might employ agents to ferret out property 
escaping taxation, and these agents, known as tax inquisitors, similar 
to the revenue agents in Kentucky, were to receive as compensation 
a part of the taxes recovered through their efforts. Under the opera- 
tion of this enlightened and civilized law some millions of personal 
property were uncovered and placed upon the tax rolls ; but this ef- 
fect was merely temporary, since many wealthy persons were driven 
out of the State and their personal property was thereby placed be- 
yond reach. Many citizens of Ohio at this time took up residences in 
the city of Washington, others moved to New York; and it is dis- 
puted by no one that the effect of the tax inquisitor law was to drive 
capital out of the State. In many cases the law is reported to have 
led to extensive blackmail; and it is a matter of common knowledge 
that persons with sufficient political influence were able to secure im- 
munity from the tax inquisitors. 

The limit of drastic laws reached. 

It will be seen that the lawmakers of Ohio had about exhausted 
human ingenuity in inventing drastic methods of securing the dis- 
closure of personal property. The only known expedient which they 
seem to have overlooked is the use of torture, which was employed 
in the Roman Empire in order to force reluctant taxpayers to dis- 
close their personal estates. What was the result of the drastic meas- 
ures which Ohio had seen fit to employ? From the reports of the 
State Auditor we learn that in 1870 personal property, including, ac- 
cording to the Ohio classification, the property of railroads and some 
other corporations, amounted to 38 per cent, of the total property 
assessed for taxation; in 1905 it amounted to 31 per cent.; so that 
in Ohio, as elsewhere, an increasing proportion of the burden of taxa- 
tion has fallen upon real estate. 

But even more significant are the figures which show the amount 
of intangible property assessed under Ohio's severe laws. The re- 



REPORT OF THE SPECIAL TAX COMMISSION. 81 

ports of the State Auditor show the total amount of money, credits 
and securities assessed for taxation in each year, and from them the 
following table may be compiled: 

TABLE SHOWING THE ASSESSED VALUE OF MONIES AND 

CREDITS IN OHIO. 

Year. Money. Credits. Securities. Total. 

1881 $40,600,000 $101,100,000 $8,600,000 $150,300,000 

1893 41,600,000 111,200,000 9,700,000 162,500,000 

1906 59,900,000 77,200,000 10,800,000 147,900,000 

1909 58,000,000 70,300,000 9,100,000 137,400,000 

It will be observed that under the operation of the tax-inquisitor 
law the amount of intangible property assessed for taxation increased 
but $12,000,000 during the twelve years from 1881 to 1893— an 
amount which is absolutely insignificant when compared with the 
growth of the State in wealth and population during this period. 

Since 1893, moreover, there has been an actual decrease in the 
imount of intangible property placed upon the assessment roll, show- 
ing that even Ohio's rigorous system, supplemented by the barbarous 
tax-inquisitor law, has singularly failed in its effort to reach this 
class of property. And these figures, which show the results for the 
entire State, are very far from revealing the real inefficiency and in- 
iquity of the system. In the cities of Ohio, where the amount of 
intangible property is greatest, the assessments are smallest; and in 
the country districts, where the amount of such property is relatively 
less, the assessments are highest. In Cincinnati, where the tax-in- 
quisitor system first took root, the escape of intangible property 
from taxation is notorious ; and the same thing is true of Cleveland 
and the other larger cities in the State. Not only has Ohio failed 
to reach the general mass of intangible property, but it has failed 
most signally in those counties where the accumulations of such prop- 
erty are greatest. Here, as elsewhere, the rule holds true that the 
taxes falling upon personal property are in inverse proportion to the 
ability of the citizens to pay. The conditions were truly described 
by the Ohio Tax Commission in 1893 : "It must be perfectly ap- 
parent that we do not succeed in getting upon the tax duplicate any 
appreciable part of the personal property which is not tangible and 
which is not in sight ;" and again : "The system as it is actually ad- 
ministered results in debauching the moral sense. It is a school of- 



82 REPORT OF THE SPECIAL TAX COMMISSION. 

perjury. It sends large amounts of property into hiding. It drives 
capital in large quantities from the State." 

In this place it is proper to remark that Ohio for many years has 
heen endeavoring to obtain a thorough revision of her system of taxa- 
tion. Amendments to the Constitution which, if adopted, would have 
permitted the State to abandon the attempt to tax all property at a 
uniform rate and introduce a modern system of taxation, were sub- 
mitted at the general elections in 1903 and 1908, and lost because of 
a constitutional requirement that an amendment, to be adopted, must 
receive a majority of all votes cast at the election. No one denies 
that the existing system is a complete failure, and one of the prin- 
cipal objects of the proposed reform is a change in the taxation of 
personal property. 

Experience of other States similar. 

It is needless to consider in detail the experience of other States. 
None have enacted severer laws than Ohio, and in none has the at- 
tempt to tax all property at a uniform rate ever met with success. So 
far as personal property is concerned, the situation has been so ac- 
curately described in a decision of the United States Circuit Court 
of Appeals that the present commission cannot do better than quote 
this opinion as its own :* 

The taxation of personal property has always and everywhere been a 
vexatious problem. Horses and cattle, wagons and carriages, the imple- 
ments of husbandry and household furniture — all things, in fact, which are 
visible, and cannot readily be concealed, including therein shares in incor- 
porated companies* which may be compelled by the law creating them to 
make returns — are within comparatively easy reach of the tax assessors. 
But the great mass of personal property, in which the wealth of a country 
ts invested, consisting of bonds and other evidences of credit, which can 
be readily hidden, escape the eye of the assessor; and nothing is more con- 
clusively settled by human experience than that it is impossible to collect 
taxes upon this kind of property within any reasonable approach to ac- 
curacy or equality, and this is not for want of long-sustained and earnest 
effort to accomplish it. There is a monotonous uniformity in the reports 
of the failures of every system attempted, however stringent may be the 
legislation, or however arbitrary cr despotic may be the powers with which 
the assessors may be clothed. The heavy hand of the tax gatherer always 
falls upon the widow and the orphan, upon trustees and guardians, whose 
estates are required by law to be revealed to the courts of probate, and 
upon those only whose consciences are unusually scrupulous, and who, 



♦National Bank of Baltimore v. City of Baltimore, 40 C. C. A. 257, 258. 



REPORT OF THE SPECIAL TAX COMMISSION. 83 

having least experience in business, are least able to bear the burdens; 
while the most inadequate returns are invariably made by the rich, who 
are usually most ingenious in evasion, and most fertile in expedients to 
escape taxation. The result is that always and everywhere no appreciable 
part of such intangible property is reached by laws, however ingeniously 
framed or severely enforced. The heavy and ever-increasing rate of taxa- 
tion in our cities makes this result inevitable. Safe investments are rarely 
found which yield more than 4 per cent., and, the rate of taxation being 
generally from 2 to 3 per cent, it is not to be wondered at that there 
phould be endeavor to escape a burden which takes more than half of their 
income. Evasion and downright perjury is the consequence. 

THE TAXATION OF MONIES, CREDITS AND SECURITIES 

IN KENTUCKY. 

Owing to the fact that our tax administration in Kentucky is 
without a responsible head and without continuity, no officer of the 
State has ever seen fit to compile statistical data covering a series of 
years, and showing the ratios of assessed values in different classes 
of property. 

The task of compiling such a table is one involving a vast amount 
of research and grubbing in the dusty records of the State Board of 
Equalization. It would also have required an investigation of the 
way in which the original figures were compiled and a reconciling oi 
different rubrics one with another in order to be sure that the figures 
related to the same things. 

If there were the slightest reason for believing that the Kentucky 
conditions were in any substantial way different from those in other 
States we should have cheerfully undertaken the task. But it is ad- 
mitted on all hands that they are substantially the same. 

However, to test the matter we took a .few samples from recent 
reports. 

In 1904 the total roll was $630,795,464, and monies, credits and 
securities were assessed at $68,829,446, or 10.9%. 

In 1911 the total roll was $846,450,020, and monies, credits and 
securities were assessed at $83,468,030, or 9.8%. 

In 1906 the ratio was 10.8%. j 

In 1907 the ratio was 11.5%. 

In 1908 the ratio was 10.1%. 

In 1910 the ratio was 9.5%. , 

As we said in our preliminary report: 



84 REPORT OP THE SPECIAL TAX COMMISSION. 

"The State of Kentucky received more revenue for the year 

1912 from its dogs than it did from all the bonds, monies and 

stocks in the State." 

When finally we note that money, credits and securities taxed in 
1910, the year of the census, were $79,000,000, or only $34 per capita, 
the necessity for further research seems to disappear. 

Nobody can seriously maintain that all monies, credits and securi- 
ties are taxed or any substantial part. 

Tax Commission's view of the situation. 

In the opinion of the Commission, the present methods of taxing 
money and credits are ineffective in producing revenue and highly 
unjust in their operation on individual taxpayers. They constitute 
one of the gravest problems connected with our system of taxation, 
and until they are changed our tax laws will remain vitally and funda- 
mentally defective. 

J 
Two opposing theories of solution. 

In considering possible remedies for the admittedly unsatisfactory 
outcome of our taxation of intangible property, we find there are two 
opposing schools of thought. Representatives of the one school have 
urged that most, if not all, classes of intangible property should be 
exempted from taxation upon the ground that it is impossible to tax 
them with a reasonable approach to equality or certainty. They con- 
tend, furthermore, that credits and most classes of securities repre- 
sent merely titles or evidences of ownership of tangible property 
which is already taxed either in this State or in other States where 
it happens to be located. To tax this tangible property and then to 
tax the evidence of ownership in it, is declared to be double taxation; 
and, since the tangible property is always taxed at its situs, it is con- 
sidered unjust to levy a second tax upon credits or securities. Rep- 
resentatives of the other school contend, as they have always done, 
that the evil of double taxation is not so serious as is alleged; and 
that it is unjust that persons who draw large incomes from intangible 
property should enjoy full protection under the laws of the State 
and yet contribute nothing to the support of public charges. They 
admit that there is much evasion of the present tax upon personal 
property, but contend that the true remedy is to strengthen the existing 
law and improve the methods of administering it. 



REPORT OF THE SPECIAL TAX COMMISSION. 85 

1. Exemption of all intangible property. 

Representatives of the first school have urged the Commission 
to recommend to the Legislature that all forms of intangible prop- 
erty be exempted from taxation. 

This passage was written before the November elections and we 
do not even yet know the fate of the Constitutional amendment. 
Under the present Constitution monies, credits and securities cannot 
be exempted. Nor can they be exempted under the proposed amend- 
ment. But they can be taxed in a manner different from other prop- 
erty and can in that way be made to contribute something. 

The Supreme Court of Washington, passing on a similar pro- 
vision in the Constitution of that State in State ex rel. Wolfe v. Par- 
menter, 50 Wash. 164, held, with one dissenting opinion, that the 
Legislature has power to exempt credits from taxation. But with 
all due respect to that eminent tribunal, the Commission is convinced 
by the reasoning of Judge Fullerton in his dissenting opinion that our 
Constitution will not permit the total exemption of such property 
from taxation. 

2. Strict enforcement of existing law. 

Representatives of the second school do not seem to realize that 
a tax of 1 to 3 per cent, upon the fair cash value of good securities 
is equivalent to a tax of from 20 to 60 per cent, of the income re- 
ceived by the taxpayers. On securities yielding the investor 6 per 
cent, such a tax takes 17 to 50 per cent, of the income; and on those 
yielding 3 per cent, it would take in some instances the entire in- 
come. These rates are exorbitant in themselves and are so excessive 
that they are virtually uncollectible except from the most helpless or 
ignorant taxpayers. Outside of our American States, no civilized 
government in the world thinks of levying such heavy taxes upon 
property as mobile and as readily concealed as money, credits and 
securities. Here and there a widow, an executor of some estate, or 
some person ignorant of methods of evading the law, may have to 
submit to our present tax upon a full valuation; but no one else 
thinks of submitting to such taxation. Very few people will pay a 
tax of $30 on the thousand on investments yielding only 3, 4 or 5 
per cent. The Commission has been unable to find a single advocate 
of this plan who considers that he himself ought to pay a tax amount- 
ing to one-third or one-fourth of his income ; and it is forced to the 
conclusion that the State should not compel anyone to do so. 



86 REPORT OF THE SPECIAL TAX COMMISSION. 

To this conclusion it may be replied that if all intangible prop- 
erty were placed upon the assessment rolls at its full value the aver- 
age tax levied throughout the State would be very much reduced. 
This is undoubtedly true, and it would be worthy of consideration if 
there were the slightest possibility that all such property could be 
found and assessed by the methods proposed. But in point of fact 
there is no such possibility. 

Our present laws make tax-dodging exceedingly profitable and in 
many cases almost a necessity for the resident of the average city 01 
town who owns any large amount of taxable securities. He cannot, 
and in justice should not pay a tax amounting to one-third or one- 
fourth of his income; and if pressed by the assessors he either makes 
a false return or else moves to a more favored locality. We are not 
now considering the case of a man who is unwilling to make any 
contribution to the support of public charges, but rather the case of 
the average citizen who is undoubtedly willing to do his duty as a 
taxpayer. If he owns taxable securities, he has no alternative but 
to evade taxation or pay an unreasonable and confiscatory tax. The 
result of the drastic tax laws of Ohio was to drive many people from 
the State, and the Commission has heard of similar instances in Ken- 
tucky. After all, the purpose of a tax law is to obtain revenue, not 
to annoy and harass the citizens ; and a tax which would drive capital 
from the State is the most unwise tax that could be placed on the 
statute book. 

It is always to be remembered that there is an absolute limit to 
the tax rate which a government can impose upon any class of prop- 
erty. During our Civil War the United States attempted to collect 
a tax of $2 per proof gallon upon spirits, with the result that the law 
was evaded to such an extent that the revenue was greatly reduced; 
and it was found that when the tax was reduced to 50 cents per proof 
gallon the revenue increased from $14,290,000 to $33,735,000. Simi- 
lar instances abound throughout the literature of finance. It is suf- 
ficient at this point for the Commission to record its belief that a tax 
of 1 to 3 per cent, upon money and credit is higher than any govern- 
ment in the world can collect with even tolerable certainty or uni- 
formity. So far as we can learn, no such tax ever has been collected, 
and we see no reason to think that it ever can be. 



REPORT OF THE SPECIAL TAX COMMISSION. 87 

Solution of the problem. 

If the Constitutional amendment recently voted upon becomes a 
part of our organic law then the solution of the problem is probably 
to be found by adopting in substance the Connecticut system modified 
by certain features of the New York law. Those systems are both 
set forth in the Appendix. As modified to meet our needs the plan 
will be in substance as follows : 

(1) Money, credits and all taxable securities will be declared a 
class by themselves for purposes of taxation. 

(2) This class of property will still be liable to taxation for all 
purposes substantially as at present unless the taxpayer exercises the 
option in (3) below. Taxpayers will be more than ever called upon 
to declare them and Assessors will be required to make diligent search 
for them under the general supervision of the State Tax Commission. 
Administrative machinery like that in use in Pennsylvania will be 
devised to make corporations aid in the revelations of taxable stocks 
and bonds. 

(3) Any taxpayer holding such taxable securities may pay to the 
State a tax at the rate of not less than 3 nor more than 6 mills per 
annum (the rate to be determined by the Legislature) and that pay- 
ment shall be in lieu of all other taxes on the security. 

(4) The payment of the tax will be made by the purchase of 
stamps furnished by the Auditor to be attached to the securities and 
canceled. 

This plan not untried. 

Taxation of money, mortgages, credits and securities by this plan 
or analogous plan, is not untried. We have a number of models to 
choose from. They are set forth in detail in the Appendix. We sum- 
marize them here. 

The essence of each plan is to draw this class of property out of 
hiding by imposing on it a light tax only. 

The plans in practice fall into two classes. The first class is a 
registration on a stamp tax, the payment of which grants exemption 
for a fixed period of time for the life of the debt. 

There is no assessment or valuation made, but the tax is on the 
face value of the debt. The rates are low compared with those on 
property in general, which is the real inducement which brings the 
securities out of hiding. Connecticut and New York offer two types 
of this class. 



88 REPORT OF THE SPECIAL TAX COMMISSION. 

The second class is a tax based on an assessed value, but at a 
fixed tax rate lower than the rate on property general. In this case 
the assessment is made presumably as of other property. Pennsyl- 
vania, Maryland, Minnesota and Iowa offer examples of this second 
type. 

THE FIRST TYPE OF SECURITY TAX. 

Connecticut. 

Any holder of a taxable security may send it to the State Treas- 
urer and pay to the State a tax of 2% of the face value for five years 
or at the same rate (4 mills per annum) for a greater or less number 
of years. The security is then otherwise exempt for that period. In 
Connecticut part of the proceeds is distributed to the town where the 
taxpayer lives. The Tax Commissioner claims he has difficulty in 
making this distribution. This law has been in force for a long time. 

New York. 

New York has passed three laws on this subject. The first was 
the Mortgage Tax Law. This provides a tax of fifty cents for each 
one hundred dollars or fractions thereof of the principal of the debt 
secured. The tax is to be paid to the recording officer when the 
mortgage is recorded. No other taxes are imposed on the mortgages. 
The tax is paid once and for all and not for any specified period of 
time. The annual yield is nearly $4,000,000. 

The second was the stock transfer tax. This is a tax on stock 
exchange transactions and cannot be adapted to our use. 

The third is of very recent enactment and has been collected for 
but little over two years. We have data only up to September, 1912. 
It is known as the Tax on Secured Debts. It is a stamp tax at the 
rate of fifty cents per $100 on bonds, notes and other debts in lieu 
of all other taxes. It, also, is paid once for all and not for a speci- 
fied time. The yield the first year was $1,852,000. The income may 
fall off, since owing to the absence of a time limit to the exemption 
securities taxed the first year will not be taxed again. 



REPORT OF THE SPECIAL TAX COMMISSION. 89 

THE SECOND TYPE OF SECURITIES TAX. 

Pennsylvania. 

For thirty years Pennsylvania has taxed intangible property at a 
uniform rate of 4 mills upon each dollar of the fair cash valuation 
($4 per $1,000). As found in the statutes, the tax has two parts: 
first, a tax upon intangible property other than corporate loans; and 
second, a tax upon the loans of counties, municipalities and business 
corporations doing business in Pennsylvania. In reality, however, 
the two laws form a single consistent scheme for the taxation of in- 
tangible property at a uniform rate. The tax on intangible property 
other than corporate loans is administered by county officials. It ap- 
plies to money at interest, money owing by solvent debtors, mort- 
gages, public securities not exempt from taxation nor included in the 
tax on corporate loans, and shares of stock in all corporations other 
than companies subject to taxation upon their capital stock or their 
business in Pennsylvania. It is collected by the counties and paid 
into the State treasury, but the State then returns three-fourths of 
the proceeds to the various counties. The tax upon corporate loans 
is deducted by the treasurers of counties, municipalities and business 
corporations when paying interest upon loans, and is paid directly 
into the State treasury, the proceeds accruing wholly to the State. 

The Supreme Court of the United States has decided that a State 
has no constitutional power to require corporations to deduct a tax 
from interest paid to non-resident bondholders. It has further decided 
that foreign corporations doing business in the State cannot be re- 
quired to deduct a tax from interest money disbursed in another State. 
The practical outcome, therefore, is that the tax on corporate loans 
has been collected chiefly from Pennsylvania corporations, and then 
only from interest paid on bonds owned by residents of Pennsyl- 
vania. The two taxes herein described apply to all money, all credits, 
all stock in business corporations not taxed directly by the State, and 
to all co.mty, municipal and corporation loans owned by residents ol 
Pennsylvania. 

In Pennsylvania the tax upon intangible property other than cor^ 
porate loans is assessed by the county officials upon the basis of re- 
turns made by the taxpayers. The law requires every person to 
make a return of all taxable money, credits and securities ; and this 
statement must be made under oath. Upon the refusal or failure of 



90 REPORT OF THE SPECIAL TAX COMMISSION. 

any person to make the required returns, the assessors are authorized 
to make an assessment from the best information they can obtain: 
but the Commission learns that in most counties of the State this 
arbitrary assessment law is not rigidly enforced. A very large part 
of the tax, possibly 50 per cent., is collected from mortgages on real 
estate, since the law makes rigorous provisions for ascertaining the 
ownership of this class of property; a considerable amount is paid 
by trust companies upon personal property which they hold in trust ; 
and the remainder, possibly 30 or 35 per cent., is paid by individuals 
assessed by sworn return or by arbitrary estimate. Even allowing 
for the large amount collected from mortgages, the increase of prop- 
erty taxed by the county officials at the rate of 4 mills has been very 
remarkable, as shown by the following table : 

TABLE SHOWING THE AMOUNT OF INTANGIBLE PROPERTY 
LOCALLY ASSESSED IN PENNSYLVANIA. 

1885 $145,300,000 1900 ._ $722,900,000 

1888 429,800,000 1903 847,100,000 

1891 575,300,000 1906 932,900,000 

1894 613,900,000 1907 1,014,000,000 

1897 673,700,000 

Even if one-half of the assessment represents mortgages on real 
estate, the results are striking. In oth'er States we have shown thai 
personal property, particularly property of an intangible character, 
forms a decreasing proportion of the total assessment and sometimes 
fails to increase at all with the growth of wealth and population. But 
in Pennsylvania during the last twenty-five years intangible property 
taxed at the rate of 4 mills has increased much more rapidly than 
the valuation of real estate, which between 1885 and 1903 increased 
from $1,697,202,000 to $2,986,197,000. The most remarkable increase 
in the assessment of intangible property occurred between 1885 and 
1888, and resulted from a stricter assessment law. But even after 
1888, the law remaining unchanged, the assessments showed a normal 
and healthy increase, as the assessment of property should in a com- 
munity that is increasing in wealth and population. With the single 
exception of Maryland, no such results have been achieved by any 
ether State in the Union. 

It is not to be inferred from what has been said that the local 
assessors discover all intangible property subject to taxation, and list 



REPORT OF THE SPECIAL TAX COMMISSION. 91 

it at its true value. In point of fact, the administration of the Penn- 
sylvania law is far from rigorous; and, except in the case of mort- 
gages and personal property held in trust by trust companies, there is 
more or less evasion. But, even so, a far greater proportion of such 
property is reached than in other States, and the persons who are 
taxed pay a reasonable rate, which does not produce material hard- 
ship. The tax is not looked upon as odious or confiscatory, and yields 
a substantial revenue which steadily increases from year to year. 

The tax upon corporate loans is collected by methods which make 
evasion comparatively difficult. Although limited in its operation to 
bonds owned by residents of Pennsylvania, the yield has steadily in- 
creased at a satisfactory rate. From 1886 to 1890 the receipts aver- 
aged $300,000 per year, this amount being somewhat less than usual, 
because considerable sums were withheld by corporations pending the 
outcome of litigation. From 1891 to 1895 the receipts averaged 
$1,130,000; from 1896 to 1900 they averaged $1,260,000; from 1901 
to 1905 they averaged $1,530,000, and in 1906 amounted to $2,352,000. 
Here, as in the figures showing the results of the tax upon tangible 
property assessed locally, we find a healthy and normal increase. It 
is clear that the tax on corporate loans, even though it is collected 
only on securities held in Pennsylvania, does not drive this class of 
property out of the State. The legal questions which originally arose 
under the requirement that the corporations deduct the tax have now 
been settled, and it may be regarded as established that a State has 
the right to require domestic corporations to deduct a tax in this 
manner from the interest on securities owned by residents. In recent 
years corporations have often voluntarily assumed the payment of 
the tax, in order to be able to advertise that their bonds are non-tax- 
able in Pennsylvania. 

From the figures just given, showing the yield in 1906, it can be 
computed that the tax on corporate loans reached approximately 
$600,000,000 of property. If we add to this figure the $1,014,000,000 
of intangible property assessed by the county officials, we have a 
total of $1,614,000,000 of intangible property taxed in Pennsylvania. 
This figure excludes the shares of corporations taxed directly by the 
State. It amounts to nearly one-half of the assessed value of real 
estate subject to taxation in Pennsylvania, and is $391,600,000 greater 
than the entire assessed value of all classes of real and personal prop- 
erty in Minnesota in 1910. If we deduct the amount representing the 



92 REPORT OF THE SPECIAL TAX COMMISSION. 

probable assessment of mortgages, we still have more than 
$1,000,000,000 of intangible property assessed for taxation. No other 
State in the Union has ever made an equally favorable showing. 
Ohio, with a far more drastic law, assessed in 1906 only $147,900,000, 
and this includes mortgages ; so that the figures are to be compared 
with the total of $1,614,000,000 in Pennsylvania. Since 1906 the 
assessment in Pennsylvania has steadily increased, while in Ohio it has 
decreased more than 7 per cent. 

Successful taxation of intangible property in Maryland. 

The experience of Maryland is as interesting and instructive as 
that of Pennsylvania. In 1896 a law was enacted which limited the 
tax which cities and counties could levy on certain classes of securi- 
ties to 30 cents on each $100 of the valuation ($3 per $1,000). This 
applies simply to the bonds of all corporations, public as well as pri- 
vate, and to the shares of foreign corporations. Shares of Maryland 
corporations, since they are reached in another way, are not subject 
to local taxation. In addition to the local taxes of 30 cents per $100, 
the securities included in the provisions of the act of 1896 are sub- 
ject to the State tax, which usually amounts to 16 cents per $100; 
so that the combined State and local taxes amount to approximately 
46 cents per $100 ($4.60 per $1,000). For fourteen years, therefore, 
Maryland has had a uniform tax of moderate amount upon certain 
classes of securities, and the results of the law have been most 
striking. 

No statistics are obtainable for the entire State; but the bulk of 
this property undoubtedly is held in the city of Baltimore, and in 
that city complete statistics are available. 

TABLE SHOWING ASSESSED VALUE OF SECURITIES TAXED 

IN THE CITY OF BALTIMORE. 

1896 $6,000,000 1902 $89,900,000 

1897 55,000,000 1903 94.300.000 

1898 55,000,000 1904 85.900.000 

1899 61,900.000 1905 104.200.000 

1900 65,800,000 1906 120,400,000 

1901 68,900,000 1907 150,900,000 

In 1896, when these securities were taxed at the full local rate, 
which was then about $20 per $1,000, the assessment was not more, 
than $6,000,000. The following year, when the tax rate was reduced 



REPORT OF THE SPECIAL TAX COMMISSION. 93 

to about $4.60 per $1,000, the assessment increased more than nine- 
fold. Since that time the assessment has nearly trebled, and Balti- 
more is now taxing tiyenty-five times as much of this class of prop- 
erty as it taxed in 1896 at the higher rate. An interesting comparison 
can be made between Boston, where they tax nearly all intangible 
property the same as we do, and Baltimore. According to estimates 
furnished by the Board of Assessors, it appears that in 1907 about 
$110,000,000 of intangible property was assessed in Boston. This 
included money on hand, on deposit and at interest, debts due to tax- 
payers, municipal bonds and other public stocks or securities, shares 
of foreign corporations and bonds of all corporations, domestic and 
foreign. At the same time, in Baltimore, under the operation of the 
uniform tax, the assessment upon shares of foreign corporations and 
bonds of domestic and foreign corporations amounted to $150,900,000. 
Baltimore has not quite the population of Boston, and if there is any 
difference in the wealth of the two cities, that of Boston is undoubtedly 
the greater; while the Baltimore taxes applied to only three of the 
five classes of property included in the Boston assessment. Moreover, 
the assessment in Baltimore was made under an antiquated law. The 
Maryland law does not provide for annual reassessments of the whole 
city, and the force at the disposal of the assessing department is so 
small that a complete annual assessment could not be had, even if the 
law required it. Moreover, arbitrary valuation is very rarely em- 
ployed, and practically the whole assessment is based upon returns 
of taxpayers. That, under such circumstances, Baltimore should 
assess $150,000,000 of the specified securities, while Boston assesses 
but $110,000,000 of intangible property of all descriptions, is a fact 
of the utmost significance. It shows that people will voluntarily re- 
turn for taxation at a reasonable rate far more property than the 
most arbitrary dooming law can place upon the assessment list. 

If we compare the assessment of intangible property with the as- 
sessment of real property in the two cities, the results are equally 
striking. In 1907 Boston assessed $110,000,000 of intangible prop- 
erty of all descriptions, while the assessed valuation of real estate 
was $1,070,000,000, the former class of property amounting to about 
10 per cent, of the latter. In Baltimore the same year the valuation 
of real property was $306,000,000, while the valuation of the specified 
classes of securities was $150,900,000, or approximately 50 per cent, 
of the real property. It is probable that in Baltimore the assessed 



94 REPORT OF THE SPECIAL TAX COMMISSION. 

value of real estate forms a smaller proportion of its true value than 
would be found to be the case in Boston ; but even if we suppose that 
the assessed value of real property in Baltimore should be increased 
100 per cent, in order to make the figures comparable with the figures 
for Boston — a highly improbable assumption — the comparison would 
still be very greatly in favor of the former city. 

The testimony of the most competent observers is highly favor- 
able to the Maryland law. Judge Oscar Leser, of the Appeal Tax 
Court, who has had better opportunities than anyone else for study- 
ing the matter, has expressed his views on the subject as follows: 

Although we believe that the proportion of the entire tax received by 
the State is greater under our system than it ought to be * * * the new 
law has produced highly beneficial results. It has largely taken away the 
incentive to perjury on the part of the taxpayer and it has encouraged the 
investment of money in taxable securities, while at the same time a sub- 
stantial revenue has been vouchsafed both city and State. The fixing of 
a uniform rate throughout the State has take*n away the former induce- 
ment of the owners of such intangible property either to remove into ad- 
joining counties where the local tax was less, or to fraudulently claim a 
taxable residence outside of the city limits. It can be readily seen that 
the moral effect of such a law has been highly beneficial. In an indirect 
way it has stimulated honesty in other matters affecting taxation, because 
the man who would lie or cheat in regard to one species of property is 
very likely to do the same thing in regard to other species. It is generally 
admitted and recognized here that the burden thus exacted from security 
owners is reasonable. Hence public opinion fully supports the law and 
frowns upon any attempted violation of it. 

Judge Leser has further stated that the officers of the Appeal Tax 
Court feel that they are enforcing a reasonable law, which is in no 
way odious and has the support of all right-minded citizens — a state- 
ment which could be made by any assessor or board of assessors 
outside of the States of Pennsylvania and Maryland. 

The Mayor of Baltimore has recently appointed an advisory com- 
mittee on taxation, which has made a careful study of the revenue 
system of the city. Professor Jacob H. Hollander, of Johns Hop- 
kins University, a member of this committee, gives the following 
testimony : 

Ten years ago the city of Baltimore, through fiscal exigency rather 
than in consequence of scientific analysis, was supplied with a method of 
taxing so-called "intangible wealth," which in the decade of its opera- 
tion, under but fairly efficient administration, has placed a steadily increas? 
ing assessment upon the tax books, to the material betterment of the city 
treasury, to the appreciable relief of the overtaxed real estate owner, to 



REPORT OP THE SPECIAL TAX COMMISSION. 95 

the manifest improvement of local tax morality, and to the lessening of 
county immigration for tax purposes. While the results thus obtained 
have been absolutely substantial and relatively favorable, they are very 
far from representing maximum possibilities. During the decade under 
consideration Baltimore suffered a devastating conflagration, involving the 
destruction of many millions of tangible property, and the necessary 
liquidation and conversion of considerable holdings of securities. The 
whole system of capital holding was disorganized, and only during the last 
two years has anything like equilibrium returned. Moreover, the assessing 
force, although a substantial improvement over the older conditions, leaves 
much to be desired, both on the score of numbers and expert equipment. 
The whole basis of securities now upon the tax books, exclusive of the 
original listing, represents little more than the spasmodic efforts of an 
inadequate force working upon the problem at hand, under intelligent 
direction, but without systematic plan in pursuit. I have no hesitation in 
saying that not only are better results obtainable, but, more than this, that 
any conceivable kind of tax would work poorly if. similarly handicapped 
in administration. That under these conditions the results have been so 
favorable confirms the fiscal possibilities of the measure at its best. 

Minnesota. 

In 1907 a tax of fifty cents per hundred dollars was placed on all 
mortgages. This was in lieu of all other taxes. There is no time 
limit to the exemption. 

In 1911 a special tax of 3 mills (one mill less than was recom- 
mended by the tax commission of that State), was imposed on money 
and credits other than mortgages in lieu of all other taxes. The Min- 
nesota Tax Commission describes this as follows : 

"Realizing the difficulty of reaching this class of property for pur- 
poses of taxation under the prevailing system, the Legislature, in 
1911, passed a law imposing a flat rate of three mills on the dollar 
on such property. It was felt that a low uniform rate of taxation 
would result in placing a large amount of this class of property on 
the tax rolls that had heretofore entirely escaped taxation. It was 
contended that the average man desired to be honest and that a low 
rate would permit him to make a truthful return of property of this 
character that he might own without the fear of having most of its 
income confiscated for taxes. 

"The results of the first year under the new law have fully justi- 
fied these conclusions. The assessed value of this class of property 
returned for taxation in 1910, under the old law, amounted to less 
than $14,000,000, while in 1911 the amount listed for taxation under 
the new law exceeded $115,000,000, an increase of nearly 850 per 



96 REPORT OF THE SPECIAL TAX COMMISSION. 

cent, in one year. In 1910 the assessed value of this class of property 
represented only 4.2 per cent, of the bank deposits of the State, while 
the assessment of 1911 amounts to 33.8 per cent, of such deposits. 

"Notwithstanding the low rate the total tax derived from this 
class of property in 1911 was but slightly less than in 1910, 67 of 
the 86 counties of the State showing an actual increase, while 52 of 
the 64 cities and villages of the State having a population of 2,000 
and over made substantial gains in revenue over 1910. Not only is 
the increase a very gratifying one, but the returns show conclusively 
that the tax is much more equitably distributed among the people than 
it was under the old law. 

"It is confidently expected that the assessment this year will show 
a considerable increase over last year. The purpose of the law is now 
better understood by both the people and the taxing officials than it 
was a year ago. The tax imposed under the law is not burdensome; 
it has been sustained by the Supreme Court, and is now an established 
part of the taxing system of the State. It is entitled to a fair trial, 
and if the ultimate results after it has had a fair trial are not satis- 
factory it can be repealed, 

"Some criticism of the law is heard because it does not permit of 
the deduction of debts from credits. It should be remembered, how- 
ever, that a person who owes a debt on his farm or his home, or on 
his farm implements or household goods or merchandise is not per- 
mitted to deduct such debt from the assessed value of the property. 
There is perhaps as much justification on the grounds of equity for 
deducting debts from these classes of property as from credits, but 
no such deductions have ever been permitted under the law. In the 
opinion holding that debts cannot be deducted from credits the Su- 
preme Court says : : 

"'Though this result leads to. a departure of the long settled policy 
of the State to allow the deduction of debts in taxation of this kind, that 
policy was at its inception of doubtful merit, in that it extended to one 
class of taxpayers a favor not granted to others. It permitted the tax- 
payer holding credits to deduct his debts from the amount of his assess- 
ment, and denied the right to any owner of other property who was also 
in debt.' " 



REPORT OF THE SPECIAL TAX COMMISSION. 97 

Iowa. 

Iowa has recently adopted practically the same law. The law is 
reproduced in full in the Appendix. 

Data are lacking as yet as to how the Iowa system is working. 

CONCLUSIONS OF THE COMMISSION. 

In view of the uncertainty as to the validity of the constitutional 
amendment the Commission can make only a tentative recommenda- 
tion. It offers for consideration the draft of a bill prepared by its 
expert embodying the best features of the tax laws of New York and 
Connecticut with some modifications from the laws of other States. 
That bill will be found in the Appendix. The Commission is inclined 
to the view that this bill should not be passed at the present session 
but that the matter be referred to the permanent State Tax Com- 
mission for further consideration, with instructions to make further 
recommendations at the next session. 



CHAPTER V. ' 

MINOR DEFECTS IN THE TAX LAWS 
WITH PROPOSED REMEDIES. 

The taxpayer's statement. 

The taxpayer's statement, as provided by the statute, is too long. 
It is more bewildering than awe-inspiring. There are one hundred 
items called for. Yet the City Assessor of Louisville gets along with 
a schedule containing only forty items and gets good results. We 
believe even that one is too long and that it can be simplified. 

Forms of this character should not be fixed by statutory pro> 
vision. They should be drawn up by an executive officer. The law 
should prescribe only the main entries, the results aimed at. We 
have provided that the State Tax Commission draw up the form. 

Simplified assessment books. 

The assessment book contains far too many columns for entries 
and call for too great a refinement. It can be greatly simplified, with 
a gain in accuracy at the same time. 

While it contains too many items, it omits several that are vital. 
There should be a column for the entry of the assessed value of the" 
improvements, separate from the value of lands, as above set forth. 
There should also be marginal columns for the extension of the taxes 
and for entering the date of payment. These last omissions are so 
serious, involving a complete breakdown of the audit, that they will 
be separately discussed. They rise above the level of "Minor Defects. 
They are of capital importance. 

The assessment roll should be the warrant for the collection o£ 
taxes. 

One most singular and unusual defect of our tax system is the 
fact that the sheriff has no complete warrant for the collection of 
taxes except against delinquents. It is hardly to be supposed that a 
sheriff would arrest a person without a warrant. But he regularly 
collects taxes — arrests a man's money — without any proper warrant. 

To be sure our law provides that "No sheriff shall receive or re- 



REPORT OF THE SPECIAL TAX COMMISSION. 99 

ceipt for any taxes until a copy of the Assessor's books, as approved 
by the Board of Supervisors, has been delivered to him by the county 
clerk, or the list filed in the county clerk's office has been certified to 
him by said clerk." But as a matter of fact, the Assessor's book con- 
tains no reference to taxes, but relates to property only. 

Under Chapter 131, Law of 1912, the county clerk is to make 
out. the tax bills and deliver them to the sheriff. The cumbersome 
form of the tax bill prescribed by this law, and the absence thereon 
of a stub for the sheriff's daily cash account, have caused so much 
complaint that it is safe to assume that these faults will be remedied 
at the next session of the Legislature, at the suggestion of the sheriffs 
and of the clerks. 

We respectfully submit that a tax bill is not a warrant for collect- 
ing taxes and that the assessment roll as now made up, without show- 
ing the taxes due, is also not a warrant; it is merely a public record 
of property assessed for taxes. 

The taxes should be extended on the assessment roll itself op- 
posite the total assessment of each person. No taxes unless so ex- 
tended should be collectible. If the county clerk extends the taxes 
on the assessment roll and the sheriff marks them paid, or delinquent, 
as the case may be, on the same roll, and if the clerk charges the 
sheriff with what is extended on the roll, it becomes a matter of sec- 
ondary importance how the tax bill is made out or by whom. The 
only essential requisite is that the bills be uniform throughout the 
State. The sheriff becomes accountable in this way for all monies 
charged him on the roll. 

Furthemore, "omitted taxes" should not be collected until after the 
property to be assessed therefor has been entered on the roll, which 
can be done by the clerk at the time the omission is discovered. And 
lastly, as suggested in Part 2, all assessments made by the State 
boards, of property taxable in the county, should be the sole authority, 
permit, warrant or whatever you like to call it, for the collection of 
taxes. 

Collection of delinquent taxes. 

All taxes are a lien on the property of the taxpayer. If he fails 
to pay them, the property may be seized and sold and the taxes thus 
recovered. This is a universal rule. 

In the administration of this rule as originally commonly enforced, 



100 REPORT OF THE SPECIAL TAX COMMISSION. 

certain abuses are apt to grow up. These abuses still flourish in Ken- 
tucky. The main abuse is that some sharp individual will watch the 
delinquent list and buy up the property sold for taxes and make large 
profits thereon. It is usually the ignorant or the poor who lose their 
property in this way. Some of them become the tenants of the "tax 
sharks" on what was once their own property. Where there are 
numbers of ignorant negroes these abuses are very prone to arise. 

It is no proper part of the purpose of seizing and selling property 
for the collection of unpaid taxes to let the shrewd and cunning profit 
by the ignorance and poverty of others. 

The sole legitimate purpose of seizing the property is to maintain 
the continuity of the public revenues. If there may be any incidental 
profit, over and above the taxes, to be won in the process, that profit 
should accrue to the government, or for the benefit of all. 

All the legitimate ends to be attained in this part of the process 
of collecting taxes can be attained by a simple device which shuts 
out the "tax shark" entirely and affords the delinquent taxpayer every 
reasonable opportunity to redeem his property. This device has been 
in operation in other States with conspicuous success. 

The plan referred to consists of the following steps: 

(1) Notice of delinquency is published and ample opportunity for 
immediate redemption is afforded. This opportunity is, however, 
practically restricted to the owner, the mortgagee or a person having 
a legal interest in the property. Payment by any other person will 
not create a lien on the property in favor of such a person, although, 
of course, it releases the property. 

(2) After a proper interval the property is sold. But it is sold 
to the Commonwealth. This sale is a suspended sale, the main rec- 
ord of which is on the assessment roll. The Commonwealth holds 
the property for five years, subject to redemption at any time, with 
proper accumulating penalties to add a stimulus for redemption. 

(3) Meanwhile, the property is reassessed and each year's taxes, 
if not paid, become an additional lien, subject, however, to redemp- 
tion in the same manner as the first year's taxes. 

The continuance of the public revenues is thus assured. 

Each reassessment affords an opportunity to ascertain the cause 
of delinquency and to bring to the attention of the delinquent the 
danger of losing his property. 

(4) If, however, the delinquent still fails to pay, at the end of 



REPORT OF THE SPECIAL TAX COMMISSION. 101 

five years, a formal deed is issued conveying the property to the Com- 
monwealth. This deed quashes all other titles, liens or claims, be- 
cause a tax lien is always antecedent to any and all other liens. 

(5) The Commonwealth now in full possession of the property 
proceeds to sell it. The taxes so recovered are paid and the surplus 
goes to the benefit of such funds as the Legislature may in its wisdom 
direct. No private person benefits. 

Under a commission system of control of the revenues, with active 
district tax commissioners, it is generally possible to find out the cause 
of delinquency and to bring about the payment of taxes long before the 
deed to the Commonwealth issues. Few, therefore, suffer great dam- 
age even by their own neglect. 

The one weak point developed in some States has been that cer- 
tain properties, possibly of little value and overassessed, accumulate 
in the hands of the State, while the old owners go on living on or 
using the land regardless of the fact that they are trespassers. 

This weakness is guarded against in the proposed statute in several 
ways. The custody of the land so acquired is placed in the hands of 
the State Tax Commission, which in its deputies, the District Tax Com- 
missioners, has a ready agency for supervision. It can search out tres- 
passers and evict them. But, furthermore, as there is no object in 
having the Commonwealth hold the property longer than is necessary 
to protect the revenues, the Commission is required to proceed at 
once to sell the land. In so doing it is directed to do what any busi- 
ness man would do in a similar case: (1) offer it to the first comer 
at a fixed price, not less than the assessed value; (2) that failing, put 
it up at auction with a fixed minimum price not less than the taxes, 
penalties and costs due; (3) that failing, to sell at auction with no 
limit. 

It is hardly conceivable that a purchaser will not be found by some 
one of these steps. If, however, any considerable amount of prop- 
erty should, in the future, accumulate, the Legislature will have ample 
time to provide anotner means. 

At first sight it may appear that this gives much power to the 
State Tax Commission and might offer temptation to graft. But that 
is not the case. The whole procedure is under the eye of the District 
Assessor, the Sheriff, the County Clerk, the County Court, the Fiscal 
Court and the Auditor of Public Accounts, to say nothing of the 



102 REPORT OF THE SPECIAL TAX COMMISSION. 

private individuals who may be interested to purchase. With such 
publicity the procedure is absolutely safe. 

As the rights of redemption under the old law as to old taxes are 
unexpired, provision should be made with the change of law to con- 
tinue the old provisions in a "validating act" until the last rights under 
the old law shall have expired. 



CHAPTER VI. 
OTHER PROPOSED REMEDIES NOT RECOMMENDED 

An income tax. 

It will be observed that in all of the foregoing we have not pro- 
posed any radical departure from the principles existing in taxation 
now in force in Kentucky, but that we have recommended only such 
changes as are aimed to make the administration of the law effective. 
It might be possible to bring about a great improvement by the adop- 
tion of some entirely new kinds of taxation — the income tax, for 
example. Inasmuch, however, as the Federal Government has started 
the taxation of incomes, it seems to us that field is closed for State 
revenues. 

Separation of State from local taxation. 

Another remedy for evils somewhat similar as those which exisc 
in Kentucky is that which is commonly known as the "separation of 
State from local taxation, as to sources of revenue." This remedy has 
been tried in California, and we are informed may be characterized 
as conspicuously successful. There the State government is sup- 
ported by revenues derived from taxation of public utilities, banks 
and insurance companies, by the old poll tax, the inheritance and a 
number of other revenues, and the State levies no ad valorem tax 
whatsoever upon what might be called the average run of taxpayers, 
that is, ordinary real estate and personal property. This plan was 
recommended for our State by our Tax Commission of 1909. It was 
favorably commented on in the preliminary report of this Commis- 
sion. 

In his preliminary report, Prof. Plehn said of this system: 

"The very fact that I have been employed for this investiga- 
tion directly implies that there was an expectation that I might 
be able to work out such a system for Kentucky. For these rea- 
sons I have given, to the possibility and desirability of this rem- 
edy, as much, if not more, study than I have given to any other 



104 REPORT OF THE SPECIAL TAX COMMISSION. 

part. But I have been forced to the conclusion that it is not, at 
present, a possibility, nor is it desirable. The main reasons for 
the introduction of that system in California do not exist at all 
in Kentucky. It would not be feasible here, at the present time, 
because the amount of property belonging to the public utilities 
and the banks, which would be the logical subjects for State taxa- 
tion, is not large enough by itself to support the State government. 
It would require a total valuation of property, amounting to about 
$700,000,000, to provide the State with a substitute for the revenues 
now derived from the general State tax of fifty cents on $100.00 
worth of property assessed, and the total value of all the property 
belonging to the public utilities and banks in the State is only 
about $300,000,000." 

In the Appendix we submit a full and detailed statement showing 
the amount of this property and its distribution among the various 
counties and all other data which led to this conclusion. 



Part III. 
THE BILLS IN DETAIL. 



CHAPTER I. 
THE GENERAL REVENUE. 

The general revenue law of the State of Kentucky was codified 
into a single act, approved March 15, 1906. This act has been 
amended a number of times since then, and includes the following 
articles, as carried into Carroll's Statutes : 

Art. I. — General Provisions. " rx " Art. X. — Collection of Taxes by 

Art. II. — Assessment of Property by Attachment. 
Assessors, and Their Duties. Art. XL — License Tax on Corpora- 

Art. III. — Assessment of Old Land tions. 

Li -i 

Grants. Art. XII. — License Tax. 

Art. IV. — Assessment of Certain Art. XIII. — Tax on Organization 

Corporations'. of Corporations, License Tax of For- 

Art. V. — Assessment of and Pay- eign Corporations, 
ment of Taxes by Railroads. Art. XIV. — Tax on Law Process. 

Art. VI. — Assessment of Distilled Art. XV. — Duties of Officers in Re- 
Spirits, lation to Revenue. 

Art. VII.— Board of Supervisors. Art. XVI.— Report of Officers. 

Art. VIII. — Collection of Revenue — Art. XVII. — Revenue Agents. 
Sheriff — Bond and Duties. Art. XVIII. — Board of Equalization. 

Art. IX.— Collection of Taxes and Art. XIX.— Inheritance Tax. 
Other Public Money by Action. 

Some sections have been amended since then, but the amend- 
ments are not very extensive. 

It is not proposed to amend at the present time all of the 
articles of this act, but only those relating to 'the general taxation 
of property and the duties of the officers in relation thereto. The 
various license taxes and inheritance tax are not disturbed by any 
of the recommendations made by this Commission, except that 
their supervision is transferred to the State Tax Commission. 
Articles one to nine, inclusive, and fifteen to eighteen have been 
largely rewritten and entirely rearranged in the main statute that 
is presented. At the same time, care has been taken to retain as 
many of the old sections as were not decidedly inconsistent with 
the new plans, and to retain, so far as possible, the old defini- 



108 REPORT OF THE SPECIAL TAX COMMISSION. 

tions and the particular provisions upon which important de- 
cisions of the courts have been rendered. 

The new provisions are almost all such as have been tried out 
in ouier States, and have been tested in courts there. The fol- 
lowing analysis is presented in the sequence of the provisions ot 
the piupusea iaw. 

Article I. 

Article one of the proposed act begins with general State levy, 
as did the old act, and in that respect we have made no change. 
It should be pointed out in this connection, however, that as soon 
as the assessment of property is brought to its proper level and 
property is really assessed at its full cash value, as we confidently 
expect it will be, the State tax rate can be reduced. If the con- 
stitutional amendment was legally adopted this section will have 
to be referred to the people if changed in any way from the old 
iaw. 

The definitions of property subject to taxation have been re- 
written, but not materially changed, except in the following par- 
ticulars : 

(1) Inasmuch as it is proposed by the Commission that the 
improvements upon real estate shall be assessed and valued sep- 
arately and apart from the land, a definition of improvements has 
been introduced. 

(2) The definitions as to the situs of personal property foi 
purposes of taxation, especially that of tangible personal property, 
have been revised so as to make that class of property taxable, so 
far as possible, where it has its actual physical situs. In so far as 
these definitions difTer from the old law, they are based upon ths 
well-tested law of Massachusetts, which is regarded as one of the 
best in the country. The purpose of this change is to lessen the 
dependence on the tax statement. 

The section regarding the exemption of property is unchanged. 
But there should be added to it the new exemption, created by 
the constitutional amendment voted on last November, if that be 
upheld, of State and municipal bonds, and by the introduction o! 
the phrase "property exempt under the laws of the United States.'' 
The latter property, of course, has always been exempt, but the 
statute failed to recognize that fact. 



REPORT OF THE SPECIAL TAX COMMISSION. 109 

Article II. 

The old article two, which dealt with the assessment of prop- 
erty by the assessors, is replaced by a new article two, which is 
divided into three parts. Subdivision one is all new matter and 
provides for the membership and organization of the State Tax 
Commission. Subdivision two relates to the powers and duties 
of the Commission. And subdivision three provides for the dis^- 
trict tax commissioners, who are to do the field work of assessment. 

SUBDIVISION I. 

The State Tax Commission. 

This is, of course, the vital part of the whole plan of reform. 
The provisions for the State Tax Commission are those which 
have been so fully discussed above in Chapter II or Part II of 
this report. The aim has been to provide for a commission of men 
of distinct ability, appointed by the Governor by reason of their 
knowledge and skill in taxation and without reference to politics. 

Subdivision two lays down the general powers and duties of 
the Commission. These have been drawn from the laws of other 
States, where they have been proved successful. The duties are 
specified in section three of the subdivision under discussion, and 
scarcely need be discussed here, as the purpose is in each case 
perfectly clear. 

• Subdivision three carries out the proposals for expert or pro- 
fessional assessors, the district tax commissioners, explained at 
length above in Chapter II of Part II of this report. Section 
two provides a means for carrying the county assessors, who were 
elected last November for a term of four years, into the new sys- 
tem-, by making them deputy tax commissioners for the term for 
which they have been elected. In order that as much as pos- 
isble of the new system may be carried into effect immediately, 
these elected county assessors are, it is proposed, to be made 
deputy tax commissioners and to be grouped into districts and 
one of them is to be selected to serve as the district tax commis- 
sioner and to be, as it were, a foreman or a general district of- 
ficer over the other county assessors and under the State Tax 
Commission. He will be the regular means of communication 
between the State Tax Commission and the assessors of the 
counties within his district. This arrangement affords a mean? 



110 REPORT OF THE SPECIAL TAX COMMISSION. 

of getting as many of the benefits of the new system and as much 
of it into force as possible so long as the present county assessors 
still have to be provided for. 

From section three of this subdivision to the end of the sub- 
division will be found the provisions for the regular system which 
will go into force, unless amended by the Legislature, four years 
from now. This system has been so fully discussed in the fore- 
going part of the report that it need not to be discussed in detail 
here. 

The funds for the support of the assessors' offices are provided 
by the same rates of commission upon the assessed value of prop- 
erty as have prevailed heretofore, but provision is made for ul- 
timately fixing regular salaries, not commissions, for the district 
assessors and their deputies under the new system. It is to be 
expected that when the assessed value of property is raised to its 
full value these commissions will be larger than is necessary, both 
for the compensation of the district tax commissioners and for 
the support of their offices, and in that event the balances are to 
revert to the treasury. It is also to be expected that, during the 
first year or two, until the assessment shall have been brought up 
to full value and especially because of the necessity of retaining 
the present county assessors for the term, for which they were 
elected, the aggregate expenses will be somewhat increased. This 
is unavoidable, but we are satisfied that the ultimate benefits of a 
just and equitable tax system and the bringing of property onto 
the rolls which has not been assessed heretofore, will far more 
than compensate for this increased expense. It is also provided 
that cities may adopt the assessments made by the district tax 
commissioners. 

Article III. 

Article three of the old law relates to the assessment of old 
land grants. These provisions are listed for re-enactment, but 
they are removed from their old place in the statute, because they 
seem somewhat inconsistent there. In place of this old article, 
we have inserted a new article three relating to the general as- 
sessment of all property. This article falls into three subdivisions, 
the first of which contains general provisions as to the principles 
to be followed in regard to the making of assessments. 



REPORT OF THE SPECIAL TAX COMMISSION. Ill 

One of the most important changes in that connection is the 
provision of Section three for the separate assessment of land 
and the improvements thereon, and the provision that cultivated 
and uncultivated lands of the same quality and similar situation 
shall be assessed at the same value. The reasons for these pro- 
visions have been discussed in the foregoing part of the report. 

Another very important new provision is in Section six, which 
provides for tax maps. The importance of this change has also 
been fully discussed above. 

The taxpayer's statement, provided for in Section eleven, is 
very much simplified, and the preparation of the forms has been 
made a duty of the State Tax Commission with as free a hand as 
to details as possible. The confusion which arises from the length 
of the old tax statements is one of the worst evils of the old system. 

In this connection, one important change is that the taxpayer 
is not to be called upon to value his property, except in instances 
where the money value provides the only proper method of de- 
scription. The duty of fixing the value falls entirely upon the 
district tax commissioner and upon the State Tax Commission. 

In section nineteen it is provided that the State Tax Commission 
may, if it deem it wise, direct the use of standard values for dif- 
ferent classes of personal property, when fairly uniform in value. 
The purpose of this has been explained in the foregoing portions 
of the report. 

The simplification of the tax statement also permits of a simpli- 
fication of the assessment rolls. In this connection it is important 
to point out that provision has been made here and elsewhere in 
the statute for the entry upon the assessment rolls of the county 
of all the assessments made by the State Tax Commission and here- 
tofore made by the State Board of Valuation and Assessment and 
the Railroad Commission. Heretofore, the practice has prevailed, 
in fact was prescribed by the statute, of having the Auditor certify 
the amount of such assessments to the county for the collection of 
the local taxes thereon. The amounts of taxable property so certi- 
fied were not, however, entered upon the county assessment rolls, 
and, therefore, were never regularly charged to the sheriffs for 
collection in the same manner as other taxes were charged. They 
were merely charged on the basis of the Auditor's certification. 
This loose practice has resulted in a number of abuses. In one 



112 REPORT OF THE SPECIAL TAX COMMISSION. 

conspicuous instance a large amount of taxes due the county and 
the town, in which a very valuable franchise had its situs, were 
compromised, and only a very small fraction thereof was paid. 
Moreover, this system makes it difficult for other taxing districts, 
than the county, especially the school districts, to follow up the 
collection of these taxes. Of course, the Commonwealth is ade- 
quately protected against loss of revenue from this source, because 
the state taxes are collected directly from the companies, but the 
county and local taxing districts should have the same tax pro- 
tection. This protection cannot be afforded so well in any way 
as it will be by having these assessments entered regularly upon 
the county rolls, in which case the sheriff becomes responsible under 
his bond for their collection. The confusion in tax collection arising from 
this source is serious, and may be shown from the following cita- 
tions from letters received by the Commission when it undertook 
tc. ascertain from the public utilities the actual amount of taxes 
levied on them and paid by them in the different taxing districts. 
One company doing business in a great many different parts of the 
State said: 

"Of course the company can prepare a list for you showing the taxes 
actually paid, but this is not what you ask for, and the total of taxes paid 
would not correspond exactly with the total of taxes levied. This discrep- 
ancy arises from the fact that in some of the taxing divisions bills have not 
been presented and in some cases even the local officials have refused to ac- 
cept payment on certifications which have been made by the State Auditor." 

Another company running into many counties and a multitude 
of districts was assessed by the State Board of Valuation and 
Assessment in 1911 and 1912 for an aggregate of $250,000 each 
year. In 1911, however, they actually paid taxes on a total assess- 
ment of $260,008 and in 1912 upon a total assessment of $246,525. 
In explanation of this discrepancy, the officer of the company said: 

"The differences are due to the imperfections in the system and the im- 
possiblity of determining exactly, at the time the State assessment is made, 
the total of the county assessments*. Oftentimes when the bills actually come 
in it is found that the assessment varies from the amount returned to the 
Board by the county authorities. Some of this difficulty is due to the at- 
tempted "equalization." Again it is often the case that this "equalization" 
is not accurately applied to our property." 

In section twenty-nine is the first of a number of provisions 

making the assessment roll effectively the warrant and the sole 

warrant for the collection of the taxes upon the property assessed 



REPORT OF THE SPECIAL TAX COMMISSION. 113 

therein. The necessity for this very important change has been 
discussed in the foregoing parts of the report. If these provisions 
be adopted, then, hereafter the one assessment roll or book will 
show not only the amount of property assessed against each person, 
but also the amount of taxes thereon due, and the amount paid. 

The State Tax Commission hopes that eventually all the cities 
of the State will abandon the practice of making a separate valua- 
tion and assessment of property for purposes of city taxation, and 
will use the county tax rolls as the basis for collecting their taxes. It 
is feared, however, that this cannot be done, without the express 
consent of the cities, under existing constitutional provisions. It is, 
therefore, provided that the cities may obtain copies of the county 
assessment roll, which would obviate the necessity of having a 
separate assessment made and of their supporting a separate office 
of assessor. If the county assessments be brought to full value and 
be equitably made, it is only a waste of money for the cities to make 
new ones. It is hoped that eventually a way may be found, either 
by constitutional amendment or otherwise, to bring about this 
highly desirable economy. Meanwhile, any city which desires to 
do so, can make the saving under the provision of section thirty. 

Subdivision two provides for the quadrennial revaluation of 
real estate, and for the fixing of rules and standard values for agri- 
cultural lands, and the "basing value" for the city lands in all cases 
where the State Tax Commission may deem it expedient. This sub- 
division gives the State Tax Commission and the assessors ample 
powers to ascertain the true value of all property, which, in our 
opinion, they never had under the old system. 

A very important change in the scope of the franchise tax is 
made in subdivision three of this article, in the subdivision, that is, 
relating to State assessments. Heretofore, the only franchises dis- 
tinctly required to be taxed were those classed as public utilities, 
and there was no provision for the taxation of any other franchises. 
This is in distinct contravention of the provisions of the constitu- 
tion, which requires that all properties shall be assessed. Every 
corporation possesses a more or less valuable franchise. It is our 
opinion that the franchise tax should be extended to cover all cor- 
porations organized for profit (excepting, of course, banks and trust 
companies whose franchises are reached by other methods of taxa- 



114 REPORT OF THE SPECIAL TAX COMMISSION. 

tion), whether organized under the laws of this State or, if they 
do business in this State, under the laws of some other government. 

The right to be a corporation, the right to do business as a cor- 
poration, the privilege conferred of acting in a corporate capacity, 
the advantages enjoyed of ease of transfer, "the value as a going 
concern," and the like, are property, and valuable property, and 
should be taxed in all instances. 

Other important new provisions in this subdivision are: 

(1) Improvements to be made in form of reports to be filed by 
the companies which will give the State Tax Commission adequate 
information to go on in making assessment of the franchises. Here- 
tofore, the State Board of Valuation and Assessment has been 
sadly handicapped by the inadequacy of the details required by 
law to be filed in these reports. Endeavor has been made also to 
improve the form of the reports to be filed concerning the tangible 
property of the railroads, value of bank shares, the property of rail- 
road bridge companies and of turnpike companies. The reports 
required in regard to distilled spirits have not been changed. Ade- 
quate penalties have been provided for in case of failure to report, 
and for making an assessment in the absence of a report. For fail- 
ure to report, the tax is to be doubled and the company may be sub- 
jected to a fine, especially if it renders a /false or fraudulent report, 
and the officers of any company are subject to severe penalties for 
making a false report. 

The provisions relating to the methods of valuing the franchises 
have been entirely revised in conformity with the experience of this 
and other states in the past. The old law was full of infelicities of 
language, which have been the foundation of no little litigation 
which has resulted from time to time in tying up the State's 
revenue. The main point is to provide that the tax authorities may 
consider one or all of the many different things which may indi- 
cate the value of the property under consideration, and that it shall 
not be pinned down to one rigid method, regardless of whether that 
method applies best in the particular case under consideration. Not 
only is this important in determining the aggregate value oif the 
corporation's property, including its franchise or its intangible 
property, but this latitude is also necessary in the matter of the 
apportionment of interstate properties and the determination of the 
amount taxable within the State. We believe that the provisions 



REPORT OF THE SPECIAL TAX COMMISSION. 115 

of the bill as proposed will commend themselves to every right- 
thinking man as providing, on the one hand, adequate power in the 
assessing board, and giving that body full discretion to protect the 
State's interest and to do full justice to the tax-payers, while on the 
other hand, it protects the companies adequately against any unjust 
taxation. 

In this connection it may be said that we have carefully exam- 
ined the long series of reports handed down by the courts all over 
the United States relating to these methods of valuation and are 
satisfied that those provided in the statute comply with every re- 
quirement laid down by the courts. 

Another change made in this subdivision relates to the assess- 
ment of the tangible property of public utilities. We have pro 
vided that all property,' tangible, and intangible of all public utilities 
operating in more than one county shall be assessed by the State 
Tax Commission instead of by the local assessors or the district 
tax commissioners. It does not require a lengthy argument to estab- 
hsh the fact that the local assessor is not the best officer to assess 
such classes of property. 

In section twelve provision is made for the entering of the State 
assessments upon the local county rolls, which was discussed above 
in another connection. Provision is also made for the giving of 
adequate hearings to all tax-payers who may wish to present their 
views before the Commission. 

Another important change is the fixing of the dates when the 
assessment must be made and when it must be completed. Else- 
where in the act the date for the payment of these taxes is also defi- 
nitely fixed. In the past, all of these dates have been indeterminate 
and failure to fix them definitely has recently resulted in a series 
of delays, so that the collection of these taxes is in arrears. 

Article IV. 

The matters covered in old articles four, five and six having 
been carried into the new article three, new article four deals with 
review and equalization, which is the next logical step after the 
assessments have been completed. 

Subdivision one provides for the county boards of supervisors 
in substantially the same manner as heretofore, with such modifi- 
cations as are necessary to make this provision accord with the new 



116 REPORT OF THE SPECIAL TAX COMMISSION. 

plans. The main thing changed is that the county boards need not 
meet except to hear appeals, save in those years when there is a 
quadrennial revaluation of real estate. This will result in a very 
considerable saving. » 

Subdivision two deals with the State Tax Commission acting 
as a State Board of Equalization, and carries into it all that was 
valuable of the old article eighteen. The procedure in case of in- 
crease or decrease in the valuation of any county is the same as 
heretofore. But it is anticipated that the State Tax Commission 
will be able to equalize in advance, as it were, and that these powers 
will be seldom exercised. If the assessment is made right in the 
first place, there is little necessity for adding an arbitrary percentage 
to it afterwards. 

Article V. 

The new article five deals with the duties of the county clerk 
in relation to revenue. The county clerk in Kentucky is virtually 
the county auditor, and it, therefore, becomes his duty to check up 
the roll and see that it is correct. It is also his duty, under the 
new act as it always has been, to charge the sheriff who is tax col- 
lector with the amount of the taxes. A new provision made here 
is that the county clerk shall extend the taxes to be collected on 
the assessment roll book; thus carrying out still further the idea that 
the assessment roll shall be the sole warrant for the collection of 
taxes. By an amendment to the old law in 1912, the county clerk 
was required to prepare tax bills and to turn them over to the sheriff 
for collection. This, as stated elsewhere in this report, was not a 
change of any particular importance, as it merely transferred the 
clerical labor of making the tax bills from the sheriff to the clerk. 
The change here proposed goes back to the old traditional methods 
of all Anglo-Saxon people, and is the only known way of making 
an effective audit. 

Article VI. 

Article six oif the new act provides for the collection of taxes. 

Subdivision one re-enacts, with comparatively little change, all 
those provisions of the law heretofore in force with one exception, 
and that is again the one already referred to, namely, the use of the 
assessment roll as the actual warrant for the collection of taxes. The 
sheriff is required to collect the taxes that are entered on the roll, 



REPORT OP THE SPECIAL TAX COMMISSION. 117 

and he is not permitted to collect any taxes upon omitted property 
until that property has been assessed and entered on the roll. We 
regard the old provisions in regard to the collection of omitted taxes 
as lax and dangerous in the extreme, as bitter experience in the past 
has shown us. The sheriff must enter the payment of the taxes on 
the rolls, as well as give the tax-payer a receipt. Under the new 
method of assessment, "omitted property" will become a thing of 
the past. 

Subdivision two, relating to the collection of taxes by attacn- 
ments, simply re-enacts the present provisions as they stand in arti- 
cle ten of the old act. 

Subdivision three relates to the collection of the State tax only 
upon the property assessed by the State Tax Commission. There 
is nothing particularly new in this subdivision, unless it be the 
incorporation in it of a practice common in other states of prohibit- 
ing any injunction to prevent the collection of taxes. Any com- 
pany which has once had an opportunity to report upon its property, 
to be heard before the proper authorities, after the report has been 
considered and before the assessment becomes final, has had every 
consideration which it has a right to demand. If it still thinks 
that the tax levy is illegal, it may pay the tax and sue to recover it, 
but it can not, by an injunction, tie up the finances of the State. 
This is all the consideration that any company is properly entitled 
to, and the State in granting even this is depriving itself of the pro- 
tection afforded by the federal constitution. 

Article VII. 

The new article seven, subdivision one, provides a decidedly new 
method for enforcing the collection of delinquent taxes. In explana- 
tion of these changes, it may be well to outline the purposes which 
everywhere and always underlie the pains and penalties imposed 
for the non-payment of taxes. 

The sole justifiable purposes are: — first, — to enforce the pay- 
ment of the tax, and second, — to insure the steady continuance of 
public revenue. It is no part of the purpose of this provision of a 
1 ix statute to deprive any person arbitrarily of his property, nor to 
allow the cunning men to take advantage of the ignorant. Property 
often goes delinquent for the non-payment of taxes through ignor- 
ance, carelessness or oversight,, and to sell that property at once to 



118 REPORT OF THE SPECIAL TAX COMMISSION. 

the highest bidder is an unnecessary harshness, not consistent with 
either the purposes of these general provisions. The result of the old 
law has been that a class of persons has grown up who make it a busi- 
ness to buy up property sold for delinquent taxes, and who watch the 
coming of tax sales as an opportunity for personal profit. If the 
assessment has been justly made, there should not be any piece 
of land which is not ample security for at least five years' taxes and 
the normal penalties which should be levied for their non-payment. 
The government is, therefore, adequately protected in its revenue 
if it takes possession of the land and holds it for five years. Any 
delinquent, who does not within five years redeem the land, may be 
assumed to have justly lost his rights, and if thereafter it is sold, 
he cannot complain. But the profit of the sale, if there be any, 
should go to the commonwealth and not to some private individual. 
We have, therefore, provided that the property shall be first tech- 
nically "sold to the State," by so marking it on the rolls, but no 
deed shall be issued for a period of five years. The property shall 
be re-assessed each year, and the taxes for the succeeding years 
shall accumulate as successive additional claims against the prop- 
erty. If nobody appears to redeem the property before the end of 
the five years, the sheriff then actually transfers it to the State, 
by issuing a formal deed. We have provided further, in that event, 
that the State Tax Commission shall take charge of this property 
and administer it as best it may in the interest of the State, and 
shall proceed at once to sell the same. It shall first fix a price at 
which the first comer may obtain the property. If nobody appears 
within a reasonable time, then it shall be sold at auction, and the 
minimum amount shall be the amount of the taxes and penalties 
due thereon. If at such a sale no bidder appears, then the Com- 
mission may order a new auction without a minimum or upset 
price. The idea is to get the property back into the taxable list as 
soon as possible. 

Furthermore, in the statute as we have written it, there are 
provisions looking to the searching out of the owner or of some re- 
sponsible claimant of any property delinquent for taxes, with a view 
to bring about its early redemption, so that the extreme measures 
will not have to be resorted to. 

We have also made provision that where the taxes run to a large 
amount, which we have set at three hundred dollars, they may be 



REPORT OP THE SPECIAL TAX COMMISSION. 119 

recovered at once by action. We believe all of these provisions are 
most equitable, and we are satisfied that they are more effective, 
than the old provisions of the law. 

In subdivision two we have made provision for the enforced 
collection of the delinquent taxes upon the state assessment roll. 
These are merely the usual provisions in such cases. 

Article VIII. 

Article eight merely brings together in one article the provisions 
originally scattered throughout the entire statute concerning the 
bonds of officers and the penalties for the failure to perform their 
duties. 

The proposed bill follows: 



AN ACT RELATING TO REVENUE AND TAXATION 

ARTICLE I. 

PROPERTY SUBJECT TO TAXATION AND GENERAL 

PROVISIONS. 

§ 1. State tax levy — An Annual tax of 50 cents upon each one 
hundred dollars of value of all property directed to be assessed for 
taxation, as hereinafter provided, shall be paid by the owner, person, 
or corporation assessed. The aggregate amount of tax realized by 
all assessments shall be for the following purposes: 2\y 2 cents for 
the ordinary expenses of the Government, 26 cents for the support 
of the common schools, 2 cents for the use of the Sinking Fund, ^2 
of one cent for the Agricultural and Mechanical College, as now 
provided by law by an act entitled "An act for the benefit of the 
Agricultural and Mechanical College, now State University, ap- 
proved April 29, 1880, including the necessary traveling expenses 
of all pupils of the State entitled to free tuition in such college and 
who continue students for a period of ten months, unless unavoid- 
ably prevented." 

§ 2. Property subject to taxation — All property within the juris- 
diction of this State, not exempt by law, shall be subject to taxation. 

§ 3. Lien on property for taxes due State, county, town — The 
commonwealth, and each county, incorporated city, town, or taxing 
district, shall have a lien on the property assessed for the taxes due 
them respectively, which shall not be defeated by gift, devise, sale, 
alienation, or any means whatever, unless the gift, devise, sale, or 
alienation shall have been made for more than five years before the 
institution of proceedings to enforce the lien, and nothing shall be 
exempt from levy and sale for taxes and cost incident to the sale. 
When any lands, or improvements, or personal property shall not be 
assessed in any one year, it may be assessed retrospectively in the 
manner provided for by law, for that year, at any time not later than 
five years thereafter. A tax levied and assessed upon personal prop- 
erty shall also create a lien on any real estate owned at the time of 



REPORT OF THE SPECIAL TAX COMMISSION. 121 

assessment by the person, to whom the personal property was as- 
sessed. 

§ 4. Definitions — For purposes of taxation, the following defini- 
tions shall rule : 

First : Property — The term "property" includes : all real estate 
and all personal property. 

Second: Real Estate — The term "real estate" includes: (1) all 
land; (2) all improvements upon land; (3) all mines, petroleum 
and gas wells, minerals, and quarries in or under the land; (4) all 
standing trees; (5) all rights appertaining to the land, to the im- 
provements, to mines, petroleum and gas wells, minerals, quarries, 
and to standing trees. 

Third : Improvements- — The term "improvements" includes : all 
buildings, structures, walls, fences, ditches, drains, shafts, tunnels, 
borings, and any other things erected upon or affixed to the land. 

Fourth: Personal Property — The term "personal property" in- 
cludes everything capable of private ownership not included in real 
estate, whether tangible or intangible, and includes all franchises of 
every class and description of corporations. 

Fifth : Situs of land — Land shall be assessed in the county in 
which it lies, without reference to conflicting titles. 

Sixth : Situs of tangible personal property — The taxable situs of 
tangible personal property shall, except as otherwise specifically 
provided by law, be determined as follows : 

a. Goods, wares, and merchandise — Goods, wares, merchandise, 
capital employed in business, and stock in trade, except ships or 
vessels, and stock employed in the business of manufacturing or of 
the mechanic arts in counties, cities, or towns in this State, other 
than those in which the owners reside, whether such owners reside 
within or without the State, shall be taxed in the counties, cities, 
or other taxing districts in which the owners hire or occupy manu- 
factories, stores, hotels, or offices, shops, or wharves. Vessels plying 
on the high seas, or in the waters of the United States, whose 
owners reside in this State shall have their situs at the place of 
residence of their owners. 

b. Machinery — Machinery employed in any branch of manu- 
factures, and all personal property within the State leased for profit 
shall be assessed where located on the day set by law for the assess- 
ment. 



122 REPORT OP THE SPECIAL TAX COMMISSION. 

c. Horses, cattle, etc. — Horses, mules, neat cattle, sheep, and 
swine, kept throughout the year in counties, cities, or towns other 
than those in which the owner resides, whether such owner resides 
within or without the State shall be assessed to the owner in the 
place where they are kept. 

d. Other tangible personal property — All other tangible personal 
property shall be assessed where the owner, or his agent, or repre- 
sentative, in whose custody the property may be, resides within this 
State. 

Seventh: Situs of intangible personal property — The taxable 
situs of intangible personal property when such property consists 
of privileges, contracts, or other rights, or other intangible personal 
property, used, exercised, or enjoyed in connection with or apper- 
taining to any real estate or to any tangible personal property, shall, 
except as otherwise specifically provided by law, be the same as the 
situs of the real estate or tangible personal property in connection 
with which the intangible personal property is used, exercised, or 
enjoyed, or to which it appertains. 

The taxable situs of all other intangible personal property shall 
be the place of residence of the owner, except when the owner 
resides without the State in which case it shall be the place of resi- 
dence of the fiduciary, agent, or other custodian of the property 
within this State. 

Eighth : Property within the jurisdiction of State — Property 
within the jurisdiction of the State includes all real estate within 
the State, all tangible personal property within the State, and all 
intangible property, rights, or privileges, exercised in this State, or 
created by the laws of this state. 

Ninth : Value — The term "value" means the fair cash value ol 
the taxable property, and shall be estimated at the price which the 
property would bring at a fair voluntary sale. 

§ 5. Respective duties of holders of equitable and legal title — 
Fiduciaries — The holder of the legal title, and the holder of the 
equitable title, and the claimant or bailee in possession of the prop- 
erty on the day when the assessment is made, shall be liable for 
taxes thereon; but, as between themselves, it shall be the duty of 
the holder of the equitable title to list the property and pay the 
taxes thereon, whether the property be in possession or not at the 
time of the payment. 



REPORT OF THE SPECIAL TAX COMMISSION. 123 

Provided, however, That an administrator, executor, trustee, com- 
mittee, curator, or agent residing in the State shall not be liable 
for taxes on intangible personal property, where the real or bene- 
ficial owner of such intangible personal property, held by them or 
any of them, resides outside of the State; but this exemption shall 
not apply in the case of an executor or administrator in the exercise 
of his office as personal representative while the estate of a de- 
ceased person is in process of settlement and before the share of 
the non-resident legatee or beneficiary is set apart to him or before 
said legatee is entitled to be paid his share. 

§ 6. Property exempt from taxation — The following property is 
exempt from taxation: Public property used for public purposes; 
property exempt under the laws of the United States; places ac- 
tually used for religious worship, with the grounds attached there- 
to, and used and appurtenant to the house of worship, not exceed- 
ing one-half acre in the cities or towns, and not exceeding two acres 
in the country; places of burial not held for private or corporate 
profit; institutions of purely public charity and institutions of edu- 
cation not used or employed for gain by any person or corpora- 
tion, and the income of which is devoted solely to the cause of edu- 
cation; public libraries, their endowments, and the income of such 
property as is used exclusively for their maintenance; all parson- 
ages or residences owned by any religious society, and occupied as 
a home, and for no other purpose, by the minister of any religion 
with not exceeding one-half acre of ground in towns and cities, and 
two acres of ground in the country appurtenant thereto; household 
goods or other personal property of a person with a family, not ex- 
ceeding two hundred and fifty dollars in value ; crops grown in the 
year in which the assessment is made and in the hands of the pro- 
ducer. 

§ 7. Shares in certain corporations not to be listed — The indi- 
vidual stockholders of any corporations which reports and pays 
taxes upon all of its property which is in this State, including its 
corporate and special franchises, whether that property be assessed 
locally or by the State Tax Commission, shall not be required to list 
their shares of stock in such corporation. The provisions of this 
section shall extend to individual share holders in banks and trust 
companies whose shares are to be listed by and the taxes thereon 
paid by the banks and trust companies or by the officers thereof, 
on behalf of the shareholders. 



124 REPORT OF THE SPECIAL TAX COMMISSION. 

ARTICLE II. 

THE STATE TAX COMMISSION. 

SUBDIVISION I. 

Membership and Organization of the State Tax Commission. 

§ 1. State Tax Commission, membership — There shall be' a 
State Tax Commission composed of three commissioners, electors 
of the State, freeholders, not less than thirty years of age, not 
more than two of whom at any one time shall be of the same po- 
litical party. 

§ 2. Appointment and term — The three commissioners shall be 
appointed by the Governor, by and with the advice and consent of 
the Senate. The three persons first to compose the Commission 
shall be appointed on or before the fourth day of March, 1914, or 
as soon after passage of this act as may be feasible, and, if pos- 
sible, prior to the final adjournment of the Legislature at this ses- 
sion. Of the three persons first appointed, one shall be appointed 
and designated to serve for a term ending on the fourth day of 
March, 1916, one for a term ending on the first day of March, 1917, 
and one for a term ending on the first day of March, 1918. Each 
of said terms shall begin upon the qualification of the person ap- 
pointed therefor. Upon the expiration of the terms of the three 
commissioners first to be appointed, as aforesaid, each succeeding 
commissioner shall be appointed and hold his office for the term of 
four years, and each commissioner shall hold his office until his 
successor shall have been appointed and has qualified. The com- 
missioners shall be eligible for reappointment. They shall during 
their term of office reside at the State Capital. No person having 
been appointed and having served as a member of the Tax Com* 
mission shall be eligible for any elective office in this State for a 
period of two years after he ceased to serve as commissioner. 

§ 3. Removal — The Governor may at any time remove any 
commissioner for inefficiency, neglect of duty, malfeasance in of- 
fice, political activities, or continued ill-health incapacitating him 
from the performance of his duties, but before removal, the com- 
missioner shall be furnished with a copy of the charges against 
him and have an opportunity to be heard in defense. 



REPORT OF THE SPECIAL TAX COMMISSION. 125 

§ 4. Entire time to service — Each commissioner and each em- 
ployee of the State Tax Commission shall devote his entire time 
to the duties of his office, and shall not hold any other position 
of trust or profit, or engage in any other occupation or business, or 
serve on or under any committee of any political party during his 
incumbency of the office. 

Corrupt practices — Any commissioner or employee of the Com- 
mission who shall engage in political activity, or who shall in any 
manner contribute, or cause to be contributed, money or any other 
thing of value to any person for election purposes, or who shall 
influence or attempt to influence any person politically, or any 
legislation through the instrumentality of his office or position, 
except as otherwise in this act specifically provided, shall be re- 
moved from office or position by the Governor if the guilty party 
be a member of the Commission, or by the Commission if an em- 
ployee. Any person wilfully violating the provisions of this sec- 
tion shall be deemed guilty of a misdemeanor and shall be fined 
in any sum not less than fifty dollars, nor more than one thousand 
dollars for each offense. 

§ 5. Salary — Each commissioner shall receive a salary of five 
thousand dollars per annum, payable monthly, as other State sal- 
aries are paid. 

§ 6. Officers and employees — The commissioners shall elect 
one of their number as chairman, and the State Tax Commission 
is authorized to employ a secretary, appraisers, experts, clerks, 
bookkeepers, stenographers and other assistants and to fix their 
compensation. The salary of the secretary shall not exceed two 
thousand dollars per annum and the aggregate expense for the 
central office force of clerks, bookkeepers and stenographers shail 
not exceed three thousand dollars per annum. The commissioners, 
secretary, appraisers, experts, clerks, bookkeepers, stenographers, 
and other assistance that may be employed, shall be entitled to 
receive from the State their actual and necessary expenses when 
traveling on business of the Commission. Such expenses shall be 
submitted in an itemized claim sworn to by the person who in- 
curred the expense, and the claim must be approved by the Com- 
mission. 

The aggregate expenses for appraisers, and experts, and for trav- 
eling expenses shall not exceed five thousand dollars per annum, pro- 



126 REPORT OF THE SPECIAL TAX COMMISSION. 

vided, however, that in any year in which there is to be made a quad- 
rennial appraisement of real estate as hereinafter in this act provided, 
the commission may, with the consent of the Governor, anticipate 
the allowance for one or more succeeding years, and may use unex- 
pended balances of previous years, but in no case shall the expendi- 
tures for this purpose exceed an average of five thousand dollars per 
annum for any four-year period. 

§ 7. Quorum — A majority of the Commission shall constitute 
a quorum to transact business, and any vacancy shall not impair 
the right of the remaining commissioners to exercise all the powers 
of the Commission so long as a majority remains. Any investiga- 
tion, inquiry, or hearing, which the Commission is authorized to 
hold or undertake, may be held by or before any one member of 
the Commission, and any decision or order made pursuant thereto 
shall, if approved and confirmed by the Commission, as shown on 
the records of the Commission, be deemed the decision or order 
of the Commission. 

§ 8. Seal — The State Tax Commission shall have an official 
seal with the words "The Tax Commission of Kentucky" and such 
other design as the commissioners may prescribe engraved thereon, 
by which it shall authenticate its orders and proceedings. 

§ 9. Office rooms, etc. — The custodian of public buildings shall 
assign to the State Tax Commission suitable quarters in the Cap- 
itol Building and shall provide the necessary office furniture. The 
Commission may purchase the necessary supplies, books, 
periodicals, and maps. All necessary expenses shall be audited and 
paid as other expenses are audited and paid. 

§ 10. Sessions — The Commission shall be in continuous ses- 
sion and open for the transaction of business during all business 
hours of each and every day, excepting Sundays and legal holidays. 
All sessions shall be open to the public. The Commission shall 
keep a record of its proceedings, which shall be a public record. 
The Commission may hold sessions at any place within the State. 

SUBDIVISION II. 

Powers and Duties of the Commission. 

§ 1. General duties — The State Tax Commission shall have 
general supervision of the entire system of taxation throughout the 



REPORT OF THE SPECIAL TAX COMMISSION. 127 

State, both State and local, including the license taxes and the 
inheritance tax. 

§ 2. State assessments' — The State Tax Commission shall ex- 
ercise all the powers and perform all the duties with reference to 
the assessment or equalization of the assessments of property for 
purposes of taxation heretofore exercised or performed by any 
State Board of Valuation and Assessment, by the Railroad Com- 
mission, by the State Board of Equalization, or by any other State 
board or commission, or State officer, except the Insurance De- 
partment in the office of the Auditor of Public Accounts. And 
all such powers and duties are hereby transferred to the State 
Tax Commission to be exercised and performed exclusively by it. 
It shall exercise such further powers with reference to State taxes 
and assessments by State authority as may be conferred upon it 
by law. It shall be the duty of the Attorney General, when re- 
quested by the State Tax Commission, to attend the meetings oi 
the Commission and advise with the same in its proceedings. 

Provided, that until the first day of January, 1916, the Auditor, 
Treasurer and Secretary of State, who, under the provisions of 
Section 4077 of Carroll Statutes of Kentucky, edition of 1909, con- 
stituted the Board of Valuation and Assessment, shall be mem- 
bers of the State Tax Commission provided for in Subdivision 1 
of this article, for the purpose of making the assessments of the 
franchises and other classes of property heretofore assessed by said 
Board of Valuation and Assessment. For this purpose, and for 
said period of time, each of said officers shall exercise the same 
powers and perform the same duties as are provided in this act 
to be exercised by and performed by the commissioners. 

§ 3. Special duties — It shall further specifically be the duty 
of the State Tax Commission, and it shall have power and au- 
thority : 

(1) Rules — To prescribe rules for its own government and for 
the transaction of its business. To keep a record of all its pro- 
ceedings. 

(2) Oaths — Each commissioner and the secretary of the Com- 
mission is empowered to administer and certify oaths. 

(3) Forms — To make out, prepare and enforce the use of all 
forms in relation to the assessment of property, collection of taxes, 
and revenues in this State. 



128 REPORT OF THE SPECIAL TAX COMMISSION. 

(4) Witnesses — To summon witnesses to appear and give testi- 
mony, and to produce records, books, papers, and documents re- 
lating to any matter which the Commission shall have power to 
investigate or determine. 

(5) Examination of books — To examine the books, accounts, 
and papers of the individuals, partnerships, companies, associa- 
tions, and corporations required by law to report to the Commis- 
sion, or to send its representative or agent to examine the same, 
when in the judgment of the Commission such an examination be 
necessary for the purposes of assessment and taxation. 

(6) Supervision of assessors — To have and to exercise general 
supervision over the local administration of the assessment and 
tax laws of the State, and over the performance of their duties by 
assessors, or by the successors to their duties, that is to say, by 
the deputy tax commissioners hereinafter in this act provided for, 
by boards of supervisors, county clerks, sheriffs, and other county, 
or district officers, so far as the duties of such officers pertain to 
the public revenues, State or local, all to the end that all assess- 
ments of property be made relatively just and equal at true value, 
and in compliance with law, and that all taxes, licenses, inheritance 
taxes, and other public charges levied by law 'shall be duly and 
fully assessed and collected according to law. 

Assessments for municipal purposes — Provided, that whenever 
any municipality shall elect to have the assessment of property 
within its jurisdiction, and for purposes of city taxation, made by 
the State Tax Commission and its deputies, as elsewhere in this 
act provided for, then the authority of this Commission shall ex- 
tend over the making of the assessments of the property in such 
municipality, for municipal purposes. 

(7) Conferences — To confer with, advise and direct assessing 
officers, boards of supervisors and other county or taxing district 
officers as to their duties relative to taxation under the law. 

(8) Prosecutions — To direct that proceedings, actions and 
prosecutions be instituted to enforce the laws relating to the 
penalties, liabilities and punishment of public officers, administer- 
ing the tax laws of the State and of all persons, officers or agents 
of corporations, or others required by law to make returns of tax- 
able property for failure or neglect to comply with the provisions 
of the tax law; and to cause complaints to be made against as- 



REPORT OP THE SPECIAL TAX COMMISSION. 129 

sessors, boards of supervisors, and other officers, whose duties con- 
cern taxation, to any court of competent jurisdiction for their re- 
moval from office for official misconduct or neglect of duty. 

' (9) Commonwealth attorneys to assist — To require the Com- 
monwealth attorneys and county attorneys to assist in the com- 
mencement and prosecution of actions and proceedings instituted 
as provided in paragraph (8) immediately above. 

(10) Reports to be collected — To require reports from county, 
district, and city officers relative to the assessment of property, col- 
lection of taxes, licenses and other revenues, the expenditures of 
public money and such other information as may be needful to 
the work of the Commission, in such form and on such blanks as 
the Commission may prescribe. 

(11) Reassessment — To order a reassessment of property or of 
any class of property in any county or taxing district, when in 
the judgment of the Commission such property has not been as- 
sessed at its true value, to the end that all property in such county 
or taxing district shall be assessed in compliance with the law. 

(12) Visit counties — To visit the counties in the State, when in 
their opinion it is necessary for the investigation of the work and 
the methods adopted by local assessors, boards of supervisors, and 
other taxing officials, in the assessment, equalization, and taxation 
of property. 

(13) To assemble the district deputy tax commissioners here- 
inafter in this act provided for in convention for instruction or 
conference. 

(14) To inquire into the provisions of the laws of other States 
and jurisdictions regarding jurisdictions and situs of property for 
purposes of taxation; to confer with tax commissioners of other 
States regarding the most effectual and equitable methods of as- 
sessment, and particularly regarding the best methods of reach- 
ing all property and avoiding conflicts and duplication of taxation 
of the same property, and to recommend to the Legislature such 
measures as will tend to bring about uniformity of methods of as- 
sessment and harmony and co-operation between the different 
States and jurisdictions in matters of taxation. 

(15) Violation of tax law — To carefully examine into all cases 
where evasion or violation of the laws for assessment and taxa- 
tion of property is alleged, complained of, or discovered, and to 



130 REPORT OF THE SPECIAL TAX COMMISSION. 

ascertain wherein the existing laws are defective or improperly or 
negligently administered, and to take such steps as may be neces- 
sary to correct the same. 

(16) Confer with Governor — To consult and confer with the 
Governor upon the subject of taxation and the administration of 
the laws in relation thereto and the progress of the work of the 
Commission and to furnish the Governor from time to time with 
such assistance and information thereon as he may require. 

(17) Report of Commission— To transmit to the Governor, for 
transmission to the Legislature, at least thirty days before the 
meeting of the Legislature, a report showing in statistical form the 
taxable property in the State, the taxes thereon and such other 
matters relating to revenues and taxation as shall be deemed of 
interest and value, with discussion and explanation thereof, to- 
gether with recommendations for the improvement of the system 
of taxation in the State, and measures for the consideration of the 
Legislature. 

(18) To extend, but not by more than thirty days, the time 
when any assessor or board of supervisors shall complete his or 
its work on the assessment roll. 

§ 4. Information confidential—It shall be unlawful for any 
commissioner or ex-commissioner, the secretary of the Commission, 
or any other employee or agent of the Commission, to divulge any 
information acquired by him in respect to the transactions, property, 
or business of any company, firm, corporation, person, association, 
co-partnership, or public utility, while in the performance of his duties 
under this act. Any violation of the provision of this section shall 
be a misdemeanor and shall be punished by a fine not exceeding five 
hundred dolalrs, or by imprisonment not exceeding six months, or 
both at the discretion of the court or the jury, and the guilty person 
shall be disqualified from office or employment in the Commission. 
Provided, however, That the Governor may at any time, by written 
order, direct that any information herein referred to shall be made 
public or laid before any court, and in that event it shall not be un- 
lawful to divulge or make known the same. And, provided further, 
that this prohibition docs not extend to any matters required by law 
to be entered upon any assessment book or roll. 



REPORT OF THE SPECIAL TAX COMMISSION. 131 

SUBDIVISION III. 

Assessment Districts and Local Deputy Tax Commissioners. 

§ 1. Assessment districts — For the purpose of the assessment 
of real and personal property for taxation, this State is hereby di- 
vided into assessment districts. From and after the passage of 
this act, until otherwise determined by act of the Legislature, the 
assessment districts shall be as follows: 

Assessment district number one shall be composed of the fol- 
lowing counties : Fulton, Hickman, Carlisle, Ballard, Graves, Mar- 
shall, and McCracken. 

Assessment district number two shall be composed of the fol- 
lowing counties : Calloway, Trigg, Christian, Lyon, Livingston, 
Crittenden, Caldwell, and Hopkins. 

Assessment district number three shall be composed of the fol- 
lowing counties : Union, Henderson, Webster. 

Assessment district number four shall be composed of the fol- 
lowing counties : Daviess, Ohio, McLean, Hancock, Grayson, 
Breckenridge, Meade, and Hardin, 

Assessment district number five shall be composed of the fol- 
lowing counties: Simpson, Todd, Logan, Muhlenberg, Allen, 
Warren, Butler, and Edmonson. 

Assessment district number six shall be composed of the fol- 
lowing counties : Barren, Hart, Larue, Nelson, Bullitt, Green, 
Taylor, Marion, Washington, Adair, Russell, Cumberland, Mon- 
roe, Metcalfe, and Casey. 

Assessment district number seven shall be composed of the 
following counties : Spencer, Shelby, Anderson, Oldham, Trimble, 
and Henry. 

Assessment district number eight shall be composed of the fol- 
lowing counties: Mercer, Boyle, Lincoln, Garrard, Clark, Powell, 
Madison, and Jessamine. 

Assessment district number nine shall be composed O'f the fol- 
lowing counties : Franklin, Woodford, Scott, Bourbon, and Fayette. 

Assessment district number ten shall be composed of the fol- 
lowing counties: Boone, Carroll, Gallatin, Grant, Owen, Kenton, 
and Campbell. 

Assessment district number eleven shall be composed of the 



132 REPORT OF THE SPECIAL TAX COMMISSION. 

following counties: Pendleton, Harrison, Nicholas, Robertson, 
Bracken, Mason, and Fleming. 

Assessment district number twelve shall be composed of the 
following counties: Greenup, Lewis, Boyd, Bath, Montgomery, 
Rowan, Menifee, Carter, Elliott, Lawrence, and Morgan. 

Assessment district number thirteen shall be composed of the 
following counties : Breathitt, Lee, Wolfe, Estill, Johnson, Mar- 
tin, Pike, Knott, Magoffin, Floyd, Leslie. Letcher, Owsley, and 
Perry. 

Assessment district number fourteen shall be composed of 
Jefferson county. 

Assessment district number fifteen shall be composed of the 
following counties: Bell, Harlan, Jackson, Laurel, Clay, Rock- 
castle, Clinton, Pulaski, Wayne, Knox, Whitley, and McCreary. 

§ 2. Powers of county assessor transferred to the State Tax 
Commissioner — The office of county assessor is hereby abolished 
under the provisions of Section 104 of the Constitution and the 
present incumbents shall be made deputy State tax commissioners 
as provided in section three immediately hereafter. There are 
hereby transferred to the State Tax Commission and its deputies 
all the powers and duties heretofore exercised by, or performed by 
the county assessors, in so far as such powers and duties are not 
changed by law. The district tax commissioners and their depu- 
ties shall exercise and perform such other powers and duties a3 
may be imposed upon them by law, or by the orders of the State 
Tax Commission. Provided, however, that so much of this sec- 
tion as may be inconsistent with the provisions for the transitional 
period as laid down in section three immediately hereafter is sus- 
pended for that period. 

§ 3. Temporary provisions for the appointment of deputy tax 
commissioners — From and after the passage of this act until the 
expiration of the term of office of the county assessors elected in 
November, 1913, as said term of office was fixed by law prior to 
the passage of this act, the provisions of this section for the 
appointment of deputy tax commissioners and of district tax com- 
missioners and their deputies shall prevail. But with the expira- 
tion of said term of office the regular provisions for the appoint- 
ment of district tax commissioners, as set forth in the sections of 
this article immediately subsequent to this section, shall prevail. 



> REPORT OP THE SPECIAL TAX COMMISSION. 133 

For convenience and brevity of reference, the period referred to 
in this section shall be known in this article as the transitional 
period and the provisions of this section shall be called "temporary '' 
provisions to distinguish them from the "regular" provisions of 
other sections of this article. 

(1) County assessors to be appointed deputy tax commissioners 
— The Governor shall, immediately upon the passage of this act, 
appoint all of those persons who were duly elected as county as- 
sessors in November, 1913, to be deputy State tax commissioners 
in and for the counties in which they were elected. The term of 
office of such deputies shall be equal to the term of office for which 
they were elected county assessors. Said deputy tax commis- 
sioners shall derive their powers solely from the State Tax Com- 
mission, of which Commission they shall be deputies. 

Penalty for failure to qualify — Any person appointed a deputy 
tax commissioner who shall wilfully fail to accept the office and dis- 
charge the duties thereof, shall be fined five hundred dollars. Each 
deputy tax commissioner herein provided for may, with the ap- 
proval of the State Tax Commission, appoint as many sober, dis- 
creet, capable persons, not under the age of twenty-four years, as 
deputies, to assist him in the discharge of his duties, as the State 
Tax Commission may deem necessary, and may remove them at 
its pleasure. They may also be removed by the State Tax Com- 
mission. The deputy tax commissioner and his deputies shall read 
and administer the oath required to be taken by persons whose 
property is required to be listed for taxation. 

The deputy tax commissioner and his deputies, before they 
enter upon the duties of the office, shall, in addition to the oath 
prescribed by the Constitution, take the following oath: 

Oath — "I do swear that I will administer to every person list- 
ing property of any description the oath prescribed by law, and 
fix the value of all property to be listed by me at its fair cash 
value, estimated at the price it would bring at a fair voluntary 
sale, without favor or partiality; and I will diligently search and 
inquire so that no person shall be passed over, or shall fail to have 
an opportunity to give a list of his taxable property, and that I 
will truly report all persons who shall fail or refuse to list their 
taxable property, after being duly called on by me for that pur- 



134 REPORT OF THE SPECIAL TAX COMMISSION. 

pose, or who have given in a false or fraudulent list, so help me 
God." 

Bond — The deputy tax commissioner shall at the same time 
execute a bond to the Commonwealth, with good surety, to be 
approved by the county court for the faithful discharge of the 
duties of his office, which bond shall be filed in the office of, and 
kept by, the clerk of the county court, and on which the deputy 
tax commissioner and his sureties shall be liable for any violation 
of the duties of his office, by himself or any of his deputies. Action 
may be instituted on it by the Commonwealth or any person ag- 
grieved, and recovery had thereon, from time to time, to the ex- 
tent of the injury sustained. 

Work to begin when — The deputy tax commissioner shall com- 
mence the duties of his office on the first day of September in each 
3^ear, and he shall assess the property in his county by justice's 
districts, in separate books, and he shall also make a separate 
book or books for each incorporated city, town, or taxing district 
(except school districts) of his county, by wards or other subdi- 
visions, as convenience may require. 

Vacancies, how filled — In case any person who was elected 
county assessor shall fail to qualify, or after qualifying as deputy 
tax commissioner shall die, resign, or be removed from office during 
his term of office, the powers and duties of his office, shall be trans- 
ferred by the State Tax Commission to the district tax commis- 
sioner hereinafter in this section provided for, and so far as that 
county is concerned, its assessment shall be made, as nearly as 
may be, in the manner provided for the regular system. The tem- 
porary deputy tax commissioners herein provided for shall, sub- 
ject to the direction, instruction and supervision of the State Tax 
Commission, make the assessment of all property within their 
counties, except as otherwise provided for, prepare the assessment 
books, and perform such other duties as may be imposed upon 
them by law. Willful disobedience by a deputy tax commissioner 
of any just and legal orders of the State Tax Commission shall 
constitute a cause for removal from office. The State Tax Com- 
mission shall remove any recalcitrant or disobedient deputy tax 
commissioner from office upon written charges preferred. But the 
accused party shall have the right of appeal to a board constituted 



REPORT OF THE SPECIAL TAX COMMISSION. 135 

in the same manner as provided for under the regular system in 
section seven of this subdivision. 

(2) Temporary district tax commissioners — The State Tax 
Commission shall, as soon as possible after the passage of this act, 
appoint one of the persons elected county assessors and who has 
been appointed and has qualified as a deputy tax commissioner as 
provided for in sub-paragraph (1) immediately above, . to serve 
as a district tax commissioner for a term equal to that for which 
he was elected county assessor. He shall, in addition to making the 
assessment of his county, under and in accordance with the di- 
rections and orders of the State Tax Commission, supervise and 
direct the assessments made by the deputy tax commissioners for 
the counties in all the counties in his district. He shall exercise, 
so far as is consistent with the temporary provisions made in this 
section, all the powers, and perform all the duties imposed upon 
the regular district tax commissioners, hereinafter in this article 
provided for, except the making of the assessment in counties 
other than his own, and the preparation of the assessment rolls 
for such counties, and shall be the regular means of communica- 
tion between the State Tax Commission and the deputy tax com- 
missioners of the counties within his district. 

(3) Compensation of deputy tax commissioners — The deputy 
tax commissioner shall, after he has returned his tax book and 
the same has been corrected by the board of supervisors, present 
to the county court his account, verified by affidavit, stating the 
total assessed value of the property listed by him as shown by his 
tax book thus corrected; and if said court, upon investigation, finds 
said account to be correct, it shall certify to the auditor the amount 
due to the deputy tax commissioner for the services required of 
him by law, which shall be based on the total value of the assess- 
ment made by him as above required, as follows : Four cents on 
the one hundred dollars of the first million, and one and one-quarter 
cents on each one hundred dollars of the excess over one million, 
but no deputy tax commissioner shall be entitled to receive more 
than three thousand dollars for his services during any year, ex- 
cept in counties containing a city of the first class, in which the 
salary shall not exceed four thousand dollars. In counties in which 
the assessed value of property exceeds thirty-eight million dollars, 
the deputy tax commissioner shall be allowed, as compensation to 



136 REPORT OF THE SPECIAL TAX COMMISSION. 

deputies appointed and qualified, the sum of one thousand five 
hundred dollars for each seven and one-half million dollars oi 
property which may be assessed in excess of thirty-eight million 
dollars. In counties where the assessment does not exceed one 
million dollars, the deputy tax commissioner shall be paid four 
and one-half cents on the one hundred dollars of the entire prop- 
erty listed. 

Deputy tax commissioner's claim to be verified — Penalty — Be- 
fore the county court shall grant such certificate of allowance, the 
deputy tax commissioner and his deputies, if any, shall, in open 
court, make and file the following affidavit, subscribed and sworn 
to by them before the clerk of the county court, viz : "I do swear 
that I have not received from any person a list of taxable property 
and returned the same until the person rendering the list has made 
oath to the truth of the same ; and I do further swear that I have, 
in no instance, assessed any property at a greater or less sum than 
T deemed a fair cash value, estimated at the price it would bring 
at a fair voluntary sale." 

Any deputy tax commissioner or deputy who shall make af- 
fidavit, knowing the same to be false in any particular, shall be 
deemed guilty of false swearing, and, on conviction, be punished 
accordingly. 

Deduction for failure to do duty — Payment of deputy tax com- 
missioner — A reduction of fifty cents shall be made from the dep- 
uty tax commissioner's compensation for each list he shall fail to 
report for taxation, or report without authority of law, and one 
dollar each for each duplicate assessment. The Auditor of Public 
Accounts shall draw his warrant on the State Treasurer for eighty 
per cent, of such allowance, and shall draw his warrant on the 
Treasurer for the remainder due the deputy tax commissioner, as 
herein provided, after the October session of the fiscal court, on 
or before which time the sheriff shall report, on oath, to said court 
a list of all persons, with their taxable property, so far as is known 
to him, who were omitted by the deputy tax commissioner; also 
the names of any persons duplicated by the deputy tax commis- 
sioner. The report of the sheriff shall be certified to by the county 
clerk to the Auditor, that the deductions may be made from the 
deputy tax commissioner's claim as herein provided. Provided, 
that nothing in this act shall be construed to deprive the deputy 



REPORT OF THE SPECIAL TAX COMMISSION. 137 

:ax commissioners during the transitional period of any fees, com* 
pensation or other payments whatever, granted to the county as- 
sessors under the law in force January 1, 1914, and said deputy 
tax commissioners shall perform all the duties of whatsoever nature 
imposed by law on the former county assessors. 

Compensation of district tax commissioners — The State Tax 
Commission shall, with the approval of the Governor, fix such 
additional sums or allowances, for each district tax commissioner, 
over and above the compensation allowed to him as a deputy tax 
commissioner in compensation for his services and for the support 
of his office as may be deemed necessary. But the aggregate per- 
sonal compensation of a district tax commissioner shall not be 
less than one thousand five hundred dollars, nor more than three 
thousand dollars, except in districts containing a city of the first 
class, where it shall not exceed four thousand dollars. During the 
transitional period the district tax commissioners and the deputy 
tax commissioners shall, within the districts and within the coun- 
ties respectively to which they are hereby assigned, have the 
powers, perform the duties and be subject to the obligations im- 
posed upon the district deputy tax commissioners and their depu- 
ties in the subsequent sections of this act. 

§ 4. District tax commissioners — x\fter the expiration of the 
temporary or transitional period, as provided for in section three 
immediately above, the following shall be the regular mode of 
appointment of deputy tax commissioners, and for their general 
supervision. 

There shall be appointed for each assessment district a deputy 
State tax commissioner, who shall be known as the district tax 
commissioner, who shall, under the direction and supervision of 
the State Tax Commission, assess the real and personal property 
within his district and for the counties within his district, except 
as otherwise provided by law. The district tax commissioners 
shall be appointed by the Governor from a list of persons recom- 
mended by the State Tax Commission in the manner hereinafter 
provided. If the Governor and the State Tax Commission ifail to 
agree upon a suitable person from that list to be district tax com- 
missioner in any district, a board composed of the Governor, the 
State Tax Commission and the Auditor of Public Accounts shall 
appoint the district tax commissioner from that list, and in that 



138 REPORT OF THE SPECIAL TAX COMMISSION. 

board the State Tax Commission shall have but one vote, and 
may, by order of the Commission, be represented by any one 
member. 

§ 5. ' Examination of candidates for the office of district tax 
commissioner— Within six months before January 1, 1918, and 
as soon thereafter as may be necessary, the State Tax Commission 
shall arrange for examinations to be held to determine the quali- 
fications of persons who may be candidates for the office of dis- 
trict tax commissioner, and such examinations shall be open to 
any qualified elector of the State. The examination shall take into 
consideration the candidate's experience as an assessor, his knowl- 
edge of the revenue laws, his knowledge of the geography of the 
State, and especially of any assessment district he may designate, 
his knowledge of the industries and property in the State or in the 
district, his general education and business experience, and his 
physical fitness. Each candidate shall present credentials from 
at least three reputable citizens as to his integrity and good moral 
character. The State Tax Commission shall determine in advance 
of the examinations the credits to be allowed for experience, 
knowledge of the revenue laws, and for each other qualification, 
and shall publish the same, and shall give notice of the times and 
places where examinations will be held. On the basis of these 
examinations, candidates shall be graded and ranked by the Com- 
mission and the districts in which they are best qualified to serve 
shall be determined. The names of persons passing this examina- 
tion shall be entered in a list to be known as the list of eligibles 
for appointment as district tax commissioners. Provided, how- 
ever, that the provisions of this section shall not be held to apply 
to the appointments made for the transitional period of the opera- 
tion of this act. 

§ 6. Temporary appointments' — The district tax commissioners 
first appointed under the provisions of section three of this sub- 
division shall hold office, unless removed for cause, for four years. 
But they shall all be eligible for reappointment after passing the 
examination provided for in section five immediately above. All 
district tax commissioners thereafter appointed shall be appointed 
solely from those standing highest in the list of eligibles for ap- 
pointment as district tax commissioners in each district, unless 
there be no nanigg in the list of eligibles in some district, in which 



REPORT OB 1 THE SPECIAL TAX COMMISSION. 139 

case the State Tax Commission may recommend any person 
deemed qualified for the office. Such district tax commissioners 
shall be eligible for reappointment without re-examination. 

§ 7. Term of office of district tax commissioners — District tax 
commissioners appointed under the regular permanent system shall 
hold office for four years, but they may be removed by the State 
Tax Commission for inefficiency, neglect of duty, malfeasance in 
office, any political activities, or continued ill health incapacitating 
them from the performance of their duties. All charges must be 
preferred in writing. If any question be raised by the person re- 
moved from office as to the sufficiency of the cause alleged for 
removal, the question shall be referred to and be decided by a 
board composed of the Governor, the Attorney General and the 
Auditor of Public Accounts; and the decision of that board shall 
be final. 

§ 8. Skill to be considered in appointments— It being the in- 
tent of the law to create in the office of district tax commissioner 
a professional spirit, skill, experience and tested ability shall be 
the sole considerations in the appointment and removal of such 
officers, and no consideration shall be given to political affiliations. 

§ 9. Deputy district tax commissioners— District tax commis- 
sioners may, with the consent and approval of the State Tax Com- 
mission, appoint deputy district tax commissioners to aid them in 
their work. Deputy district tax commissioners may be employed 
for part of the year only, or for the whole year, at the discretion 
of the State Tax Commission. The State Tax Commission shall 
iix the rate of compensation of deputy district tax commissioners, 
provided that the sum of the salary of the district tax commis- 
sioner together with the compensation of his deputies shall in no 
case exceed eighty per cent, of the allowance for the support of 
the office of district tax commissioner made in section ten of this 
subdivision immediately following. 

§ 10. Funds of the support of district tax commissioner's office 

— Allowance shall be made for the support of the office of district 
tax commissioner in each district and for the payment for his 
services and those of his deputies, if there be any, as follows: 
Four cents on each one hundred dollars of the first million dol- 
lars' worth of assessed valuation of property within each county 
in his district, as finally reviewed and equalized, and one and one- 



140 REPORT OF THE SPECIAL TAX COMMISSION. 

quarter cents on each one hundred dollars of the excess over one 
million dollars of such assessed valuation. The State Tax Com- 
mission shall from time to time recommend to the Legislature 
changes to be made by a general law in the above rates for com- 
puting the allowances for the support of the offices of district tax 
commissioners, but no classification of counties, districts, or of 
rates or compensation shall be made which shall contravene the 
spirit of paragraphs "fifteenth" and "eighteenth" of Section 59 
of the Constitution of this State. There is hereby appropriated 
each year out of any money in the State Treasury not otherwise 
appropriated, a sum sufficient to pay the allowances computed as 
above set forth. The State Tax Commission shall fix the amount 
that shall be used out of each district allowance for the payment 
of the salary of the district tax commissioner and for the com- 
pensation of his deputies, if any be deemed necessary, and shall 
direct how the remainder shall be expended for the maps and other 
supplies for the district tax commissioner's office. No district tax 
commissioner shall receive less than fifteen hundred dollars in 
salary, nor more than three thousand dollars except in a district 
containing a city of the first class wherein the salary shall not ex- 
ceed four thousand dollars. The State Tax Commission shall, 
with the approval of the Governor, fix the salary within the limits 
of fifteen hundred dollars and three thousand dollars of each dis- 
trict tax commissioner. 

Advance to be allowed — The State Tax Commission shall de- 
termine what advances upon compensation of district tax com- 
missioners and of their deputies and for the expenses of their of- 
fice shall be made prior to the completion of the assessment, and 
when and in what installments such advances shall be paid. Such 
advances shall not, in the aggregate, exceed in any district, or in 
any one assessment period, eighty per cent, of the amount which 
the compensation would have been if computed upon the basis 
of the last completed assessment. The Auditor of Public Ac- 
counts shall draw his warrant on the State Treasurer, payable to 
the district tax commissioners, for the advances ordered by the 
Commission. After the close of the assessment the State Tax Com- 
mission shall compute the total amount due each district tax com- 
missioner and shall certify to the Auditor of Public Accounts the 
balances due. The Auditor of Public Accounts shall then draw 



REPORT OF THE SPECIAL TAX COMMISSION. 141 

his warrant upon the State Treasurer for the balance due, which 
shall be paid to the district tax commissioners. Any balances re- 
maining unused in the allowances for the support of the district 
tax commissioner's offices at the close of any one year in which 
no quadrennial assessment is made shall be placed in a fund in 
the State Treasury to be known as the quadrennial assessment 
fund. This fund shall, in the year in which the quadrennial assess- 
ment is made, be available to meet any extraordinary expenses of 
the State Tax Commission in supervising the quadrennial assess- 
ment and may be expended by its order in any part of the State. 
All money which may accumulate in said fund is hereby appro- 
priated to the above purpose. Any balance remaining in the fund 
at the close of the quadrennial assessment shall revert to the gen- 
eral fund of the Commonwealth. 

§ 11. Oath of office and failure to take office — Each district 
tax commissioner and each of his deputies, before he enters upon 
the duties of his office, shall take the oath prescribed by Section 
228 of the Constitution of this Commonwealth. 

§ 12. Bond of district tax commissioners — Each district tax 
commissioner shall, before entering upon his duties, execute a bond 
to the Commonwealth, in such amount as the State Tax Commis- 
sion shall determine, with good surety, to be approved by the At- 
torney General of the State, for the faithful discharge of the duties 
of his office, which bond shall be filed and safely kept in the of- 
fice of the State Tax Commission, and on which the district tax 
commissioner and his sureties shall be liable for any violation of 
the duties of his office, by himself or any of his deputies. Action 
may be instituted on it by the Commonwealth or any person ag- 
grieved, and recovery had thereon to the extent of the injury sus- 
tained. 

§ 13. Entire time to be devoted to office — Each district tax 
commissioner, whether appointed as provided in section three or 
in section four of this subdivision, shall devote his entire time to 
the performance of his duties and shall not hold any position of 
trust or profit, or engage in any occupation or business interfering 
with or inconsistent with his duty as assessor. During the period 
from January first until September first in each year the district 
tax commissioner shall devote his time to the correction and re- 
vision of the tax maps, and to the collecting, filing and analysis 



142 REPORT OP THE SPECIAL TAX COMMISSION. 

of data concerning the property in his district and its values, and 
he shall make diligent examination of properties and values and 
perform such other duties as the State Tax Commission shall pre- 
scribe. 

§ 14. Office rooms — The fiscal court of each county, or what- 
ever body shall take over the powers of the fiscal court in any 
county, shall provide for the district tax commissioner a suitable 
office room or rooms, when possible in the county courthouse, or 
when that is not possible, in some other building, together with 
suitable furniture, in which office shall be safely kept the books, 
maps, taxpayers' lists, papers and all other records pertaining to 
the assessment of property within that county, except when any 
such books or records are required by law to be placed in the cus~ 
tody of other officers. In assessment districts too small in the 
opinion of the State Tax Commission to warrant the appointment 
of a sufficient number of deputies to allow one for each county, 
the county clerk shall have custody of the district tax commis- 
sioner's office, books, records and papers during the necessary ab- 
sence of the district tax commissioner in other parts of his district. 
The office of the district tax commissioner in each county shall be 
open to the public for the examination of all public records therein 
during all business hours. The provisions of Section 1197 of Car- 
roll's Kentucky Statutes, ninth edition, 1909, are hereby extended 
to cover these public records. 

ARTICLE III. 

ASSESSMENT OF PROPERTY. 

SUBDIVISION I. 

General Provisions. 

§ 1. Property to be assessed in counties— All taxable property, 
except such as is by law required to be assessed by the State Tax 
Commission, shall be assessed by the district tax commissioners 
or their deputies in the county in which it has its situs. Provided, 
that during the transitional period established by section three of 
subdivision three of article two of this act, the assessment shall be 
made by the deputy tax commissioners therein provided for, 



REPORT OF THE SPECIAL TAX COMMISSION. 143 

§ 2. Assessments to be at full cash value — All taxable property 
must be assessed at its full cash value. 

§ 3. Land and improvements to be separately assessed — Land 
and the improvements thereon shall be separately listed and as- 
sessed. Cultivated and uncultivated lands, of the same quality and 
similarly situated, shall be assessed at the same value. 

§ 4. Date of assessment— All taxable property shall be assessed 
and valued as of the first day of September in each year, except 
that a complete revaluation and equalization of land and improve- 
ments shall be made but once in four years. The first quadrennial 
revaluation of land and improvements shall be made as of the first 
day of September in the year 1916, and thereafter once every four 
years. The provisions of this act relative to the quadrennial as- 
sessment of land and improvements shall be suspended for the as- 
sessment to be made as of the first day of September, 1914 and 
1915. 

§ 5. Annual assessment roll— A new assessment roll shall be 
made in each county each year. In the years when a complete re • 
valuation of land and improvements is not to be made, the dis- 
trict tax commissioner shall revise the previous assessment roll 
as to lands and improvements by adding the assessment of new 
improvements, removing the assessment of improvements de- 
stroyed, by entering the names of new owners and entering all new 
subdivisions of lands. But he shall value lands and old improve- 
ments at the same rates as may be fixed at the time of the quadren- 
nial valuation. All taxable personal property shall be assessed 
and valued by him each year and entered in the assessment roll. 

§ 6. Fiscal court to provide tax maps — The fiscal court of each 
county, or whatever body may take over the powers thereof in 
any county, shall, on or before July 1, 1916, provide the district 
tax commissioner with a complete and accurate map of the county, 
showing, in such form, on such scale and in such detail, as the 
State Tax Commission shall prescribe, all land within the county 
and the division thereof into tracts, farms, city and town lots, or 
otherwise, also all streams, roads, ponds over four acres, lakes, 
street railroads and such other physical features, property boundary 
lines and other matters, as the Commission shall prescribe. This 
map shall be known as the county tax map. The expense of 



144 REPORT OF THE SPECIAL TAX COMMISSION. 

making this map in the first instance shall be borne equally by 
the county and the State. 

Up-keep of tax maps — It shall be the duty of the district tax 
commissioner to revise this map from time to time, to make new 
copies when necessary, and to keep the same up to date, clean, 
legible, and in good condition, and the expenses connected with the 
revision and up-keep of the county tax maps shall be paid out of 
the allowance for the maintenance of his office, when such ex- 
penses have been approved by the State Tax Commission. It shall 
be one of the first duties of the State Tax Commission, after its 
organization, to prepare the specifications for these county tax 
maps, and to transmit them to the fiscal courts. If the fiscal court 
of any county fail or neglect to provide a county tax map, the 
State Tax Commission shall cause one to be made, and one-half 
of the cost of making the map shall be collected from the county 
in the same manner that other valid claims against the county may 
be collected. 

§ 7. Use of tax map — Liability of district tax commissioner — 
After the completion of the tax maps, the district tax commissioner 
shall use the county tax map in his district to check the accuracy 
and completeness of his assessment roll. He shall enter upom his 
pssessment roll every piece of taxable land shown upon the map. 
He shall be liable under his bond for the taxes, State and county, 
which should have been collected upon any and every piece of land 
shown upon the map and not entered in the assessment roll. 

§ 8. Description of lands — Lands shall be described in the 
assessment roll by general boundaries, or in counties which have 
been divided into sections by the United States land survey, by 
section number and the customarily recognized fractional sub- 
divisions thereof. But lands may be described by reference to 
numbers or letters on plats or maps on file in office of the county 
court clerk, or on the county tax maps. The State Tax Commis- 
sion shall fix and authorize abbreviations which shall be used in 
the description of lands, but which shall be sufficient to clearly 
identify the lands described. 

§ 9. Real estate assessed to owner if known — Real estate shall 
be assessed to the last ascertainable owner of record of the first 
freehold estate therein, and may be assessed to "unknown owners," 
if none be ascertainable. No error in the name of the owner shall 



REPORT OF THE SPECIAL TAX COMMISSION. 145 

invalidate the assessment, nor shall any error in the description 
of the property invalidate the assessment, provided the description 
be .sufficient to identify the property intended to be assessed. 

§ 10. County clerk to certify conveyances, etc. — Each county 
court clerk shall, on or before the first day of September of each 
year, make and certify to the district tax commissioner of the dis- 
trict in which the county lies, in such form and in such detail as 
the State Tax Commission shall prescribe, a complete statement 
of all conveyances of lands, mortgages or other liens upon lands 
and other obligations for money due or to be paid, and all building 
contracts. The statements shall show distinctly the dates of execu- 
tion of the conveyances, or contracts, the dates of execution and 
of maturity of notes and other evidences of indebtedness; the con- 
sideration therefor; the date of filing or recording; the amount 
thereof; and the name and county of residence of the owner, payee, 
beneficial holder thereof or other person or corporation liable for 
taxes thereon ; and such other matters or things as shall be ordered 
by the State Tax Commission. Said statements shall be made tc 
each district tax commissioner of the State of such notes or othei 
evidences of indebtedness as may be owned or held by persons or 
corporations residing, or having their principal place of business, in 
the county of such deputy tax commissioner. No mortgage, con- 
veyance or other instrument of writing constituting a lien or other 
security for any note or other evidence of indebtedness shall be 
received for record by any county clerk of this Commonwealth. 
Unless such mortgage, conveyance, or other writing, give the county 
and State of 'the residence and postoffice address of the person or 
corporation owning or holding said note or other evidence of in- 
debtedness. Should there be an assignment of such note or other 
evidence of indebtedness, of record in the clerk's office, the assign- 
ment shall state the county and State of the residence and post- 
office address of the assignee; unless any assignment is made of 
record, the original holder or owner shall be liable for taxes as 
though no assignment had been made. Any person who shall 
knowingly and intentionally give false or fictitious address or 
name in any such instrument or assignment, as above mentioned, 
or other than the true consideration in any conveyance, shall be 
guilty of a misdemeanor and shall, upon conviction, be fined not 
less than ten dollars nor more than one thousand dollars. Each 



146 REPORT OP THE SPECIAL TAX COMMISSION. 

statement made by the county clerk, as herein required, shall cover 
a period of one year next prior to the date such statement is re- 
quired to be made. Said statement shall be sworn to by the clerk 
before some person authorized to administer oaths, as a full and 
complete statement of said facts. For his services in making such 
statements, the clerk shall be paid a reasonable compensation by 
the fiscal court of his respective county; said statement shall be 
returned by the various deputy tax commissioners, with their tax 
books, schedules and list of conveyances, to the county clerks of 
their respective counties for the use of the boards of supervisors. 
Any county clerk failing to perform his duties under this section 
shall be punished by a fine of not less than fifty dollars nor more 
than one hundred dollars, to be recovered by warrant or indict- 
ment. Nothing herein shall be construed to effect the validity of 
any instrument or assignment heretofore made. 

§ 11. Taxpayer's statement — To aid him in making the assess- 
ment, the district tax commissioner shall each year exact from each 
person a list or statement, under oath, setting forth specifically all 
the real estate and personal property owned by such person, or in 
his possession, or under his control, on the first day of September,, 
and the situs of such taxable property. This list or statement 
shall be in writing, or in printing and writing, in such form and 
detail as the State Tax Commission shall from time to time pre- 
scribe, and shall show all property belonging to, claimed by, or 
in the possession or under the control or management of the per- 
son making the list or statement, whether such person be an indi- 
vidual, a firm, association, company, or corporation. 

Lands and improvements to be separately valued — In pre- 
scribing the form for the list or statement to be exacted from each 
person, the State Tax Commission shall provide for the separate 
listing of lands, whether in tracts or city and town lots, and of im- 
provements, in the classes specified in section four of article one 
of this act, and in such other classes as the State Tax Commission 
shall deem necessary. The list or statement shall contain an exact 
description of all lands in parcels or subdivisions as required in 
section eight of subdivision one of article three of this act. The 
list shall also contain all personal property of each person in such 
classes as the State Tax Commission shall prescribe, and shall 
show specifically all taxable bonds; stocks; notes; accounts; 



REPORT OF THE SPECIAL TAX COMMISSION. 147 

credits; cash; the number of thoroughbred and common horses, 
of each sex and age; mules; asses; neat cattle; sheep; swine; 
agricultural implements and machinery ; other tools and machinery; 
wagons; carriages; automobiles; other vehicles; safes; household 
furniture; musical instruments; manufactured articles; raw ma- 
terials for manufacturers; paintings; books; jewelry; diamonds 
and other precious stones; watches; silverware; steam engines; 
steamboat and other water craft ; patent rights ; wines, whiskies, 
brandies and other liquors; stocks of goods, wares and merchan- 
dise, and such other matters and things as the State Tax Commis- 
sion shall prescribe. 

§ 12. Penalty for refusal to file statement — If any person, after 
demand made by the assessor, neglects or refuses to give, under 
oath, the statement provided for in section eleven of subdivision 
one, article three, of this act, immediately before this section, or 
to comply with the requirements of the law, the deputy tax com- 
missioner must note the refusal on the assessment book, opposite 
the name of such person, and must make an estimate o£ the value 
of the taxable property of such person. At the close of the assess- 
ment the deputy tax commissioner shall transmit to the board of 
supervisors in each county and to the State Tax Commission a 
verified report in writing, separate from the assessment roll, con- 
taining a complete list of all persons who • refuse or neglect to 
furnish a statement of their property as in this act provided, or 
to comply with the requirements of this act, together with the 
amount of the assessment upon the property of such persons, with 
a statement of the facts, if any, upon which the assessment was 
made, and the valuation of the property so assessed ascertained. 
Such assessments shall be called for convenience "arbitrary as- 
sessments," but they shall be made as fairly, and equitably as pos- 
sible in the best judgment of the deputy tax commissioner. No 
board of supervisors, nor the State Tax Commission, may reduce 
any arbitrary assessment, but may raise the same, if found to be 
too low, to such amount as may be deemed just. Any excessive 
tax resulting from an arbitrary assessment is hereby declared to 
be imposed as a penalty for an unlawful act, and if not paid or 
collected as are other taxes, may, together with the proper tax, be 
collected as are other fines and penalties. Should any person 
neglecting or refusing in any one year to give the statement herein 



148 REPORT OF THE SPECIAL TAX COMMISSION. 

required, neglect or refuse to do so the next succeeding year, the 
arbitrary assessment for the second year shall be double that of 
the preceding year, and the doubling shall continue each year 
thereafter until a satisfactory statement shall be rendered. 
Provided, however, that no arbitrary assessment shall be made 
upon lands, nor at the time of the quadrennial assessment of lands 
and improvements shall any arbitrary assessment be made upon 
improvements, it being the duty of the district tax commissioner, 
the boards of supervisors and the State Tax Commission, with or 
without the taxpayer's statement, to find and value all lands and 
the improvements thereon at the time of the quadrennial assess- 
ment. And provided, further, that if the owner of any property 
found by the deputy tax commissioner be absent or unknown, the 
deputy tax commissioner must make an estimate of the value of 
such property, which shall not be deemed an arbitrary assessment, 
and which may, on proper showing, be lowered by a board of 
equalization. 

§ 13. Penalty for fraud — Any property wilfully concealed, re- 
moved, transferred or misrepresented by the owner, or agent 
thereof, to evade taxation, must upon discovery be assessed at not 
exceeding three times its value, and the assessment so made must 
not be reduced by any board of equalization. 

§ 14. Double taxation of property not assessed the year before 

— Any property discovered by the district tax commissioner to 
have escaped taxation the preceding year, if such property is in 
the ownership or under the control of the same person who owned 
or controlled it the preceding year, may be assessed at double its 
value. 

§ 15. Roll books to be provided — Before the first day of Sep- 
tember of each year, the State Tax Commission shall deliver to each 
county clerk of this State for the use of the district tax commis- 
sioners, a sufficient number of assessment roll books, and the 
necessary blank schedules or taxpayers' lists, for the assessment 
of all property, real and personal, with the affidavit attached 
thereto to be signed and sworn to by the person returning the list. 

§ 16. Itemized list — The form of the list or statement shall 
provide a place for the entry of the value of each item of property 
listed. The person listing his property may enter his estimate of 
the value thereof. But the estimate of value entered by the person 



REPORT OF THE SPECIAL TAX COMMISSION. 149 

listing the property shall not be binding on the deputy tax commis- 
sioner, nor on any board of equalization, nor on the State Tax 
Commission, except in cases where value affords the sole appro- 
priate description of the property, and even in such cases the right 
of the taxing officials to question the accuracy of the statement as 
to the amount thereof is reserved. 

§ 17. Taxpayer's oath — The form of the taxpayer's oath shall 
be substantially as follows: 

"I, , a resident of county, 

do swear that the above list contains a full and correct statement 
of all property subject to taxation, owned by me, in my possession 
or under my control on the first day of September last; and that I 
have not, in any manner whatsoever, concealed, transferred or dis- 
posed of any property, or placed any property out of the county, 
or of my possession for the purpose of avoiding any assessment 
upon the same or of making this statement." 

§ 18. Deputy tax commissioner may examine under oath — 
The district tax commissioner and his deputies shall be authorized 
to examine persons under oath as to their property, and as to the 
value thereof, to examine books and papers to ascertain the amount 
and value of property. The information obtained from the tax- 
payer's lists or statements, or as provided in this section, except 
in so far as it may afterwards appear on the assessment roll or 
book, shall be deemed confidential and all the provisions of section 
four in subdivision two of article two of this act shall apply to 
district tax commissioners and their deputies as they do to the 
commissioners and to their employees, except that it shall be law- 
ful to submit this information to any board of supervisors and to 
the State Tax Commission. 

§ 19. District tax commissioner to fix value — The district tax 
commissioner shall, from his own knowledge, from the statement 
of the person listing the property and such other information as 
he may be able to obtain, fix the value upon all taxable property. 
But the State Tax Commission may direct the use, solely for pur* 
poses of uniformity, in ascertaining the fair cash values, of standard 
or basing values per unit of land measurements for the valuation 
of real estate as hereinafter in this act provided. The State Tax 
Commission may further classify personal property and, for the 
same purposes, may direct the use of standard values 'for each unit 



150 REPORT OP THE SPECIAL TAX COMMISSION. 

of count or measurement of each class. It may especially, and 
each year, classify and grade all horse kind, mules, asses, neat 
cattle, sheep, swine and poultry and fix a value per unit for each 
class or grade, and in like manner classify, grade and value grain, 
tobacco, hemp, and any other kinds of personal property capable 
of such classification and fairly uniform in value throughout the 
State and widely distributed. The district tax commissioners shall 
follow these standard values, except when the use thereof for 
any reason shall result in inequality. 

§ 20. Preparation of the assessment books — The district tax 
commissioners must prepare each year an assessment book or 
books for each county in the form and manner to be provided by 
the State Tax Commission. He shall prepare the book or books 
for each county according to justice's districts, incorporated cities, 
towns and taxing districts therein. Where two or more books are 
used, each book shall be numbered in sequence and described in 
such manner on title page and cover as to clearly indicate the tax- 
ing district or districts or portions of the county contained therein, 
and each book shall contain, near the front page and before the 
assessment entries, a complete list of all the books constituting 
the assessment roll of the county and showing its place in the 
series of books. Assessments may be entered alphabetically or 
in any convenient geographical sequence, but in the latter case 
there shall be prepared either at the end of the last book after all 
the assessment entries, or in a separate book, a complete alpha- 
betical list or index of all the persons assessed, with proper refer- 
ence to the page or pages of the book or books in which the as- 
sessments are entered. Clerical or other errors or omissions in 
the index shall in no wise affect the validity of any assessment. 
At the close of each book, except the last in sequence, there shall 
be a statement showing the number and description of the next 
book in order, and in the last book, a statement that the roll ends 
here. All blank spaces and pages in any book upon which no as- 
sessment entries are made shall be ruled or marked off, so as to 
clearly show the fact that the entries are completed or that they 
are continued on subsequent pages and upon which pages. 

The assessment roll shall show under appropriate headings and 
columns, as prescribed by the State Tax Commission, the follow- 



• REPORT OF THE SPECIAL TAX COMMISSION. 151 

ing items and such others as may be from time to time prescribed 
by the State Tax Commission: 

(1) The name and postoffice address, if known, of the person 
to whom the property is assessed. 

(2) Lands described as in this act provided. 

(3) Improvements on land. 

(4) All personal property in such detail as the State Tax Commis- 
sion shall prescribe, but failure to enumerate personal property 
in detail shall not invalidate any assessment, provided that the total 
amount in value assessed against each person is shown. 

(5) The cash value of each item assessed. 

(6) Franchises, railroad property and all other property as- 
sessed by the State Tax Commission and assigned or apportioned 
to the county and other local districts and the value thereof as- 
sessed. 

(7) The taxing district in which the property is assessed. 

(8) The total value of all property assessed against each per- 
son. 

(9) The sum totals of all lines and columns. 

(10) The assessment books shall also contain appropriate col- 
umns for the entry of the rates of taxes levied upon the property 
and for the extension of the taxes levied' upon the property of 
each person, but these columns shall not be filled in by the district 
tax commissioner, but by the county clerk, as hereinafter in thi*» 
act provided. 

Entries shall be made with ink, and may be made in writing, 
or by writing and printing, by rubber stamp or other device. 
Values shall be in figures. All entries shall be fair, neat and legible. 
No erasures, either by rubbing, knife, or chemical, or other means, ■ 
shall be permitted on the assessment roll or book, but errors may 
be corrected in such manner as to show clearly the original er- 
roneous entries and the correct entries, and such corrections shall 
be explained in the margin and signed by the person making them, 
and the corrections so made, if made by an authorized official, shall 
be valid as if they were original entries. 

§ 21. Illegal entries in assessment books — No person, save the 
district tax commissioner, his deputies, and other officials expressly 
required by law so to do, shall make any entry, correction or altera- 
tion in the assessment books or rolls. Any person illegally making 



152 REPORT OF THE SPECIAL TAX COMMISSION. 

such entry, correction or alteration or mutilating the assessment 
books or rolls shall be guilty of a felony, and punished by im- 
prisonment in the State penitentiary from one to five years. 

§ 22. District tax commissioner's oath — On or before the first 
day of January in each year, the district tax commissioner shall 
complete the assessment rolls for each and every county in his 
district, and he and his deputies must take and subscribe an affi- 
davit in the assessment book to be substantially as follows: 

"I, , district tax commissioner for the 

district and for the county of , 

do swear that, between the first day of September and the first day of 

January, in the year of our Lord nineteen hundred and , 

I have made diligent inquiry and examination to ascertain all the 
property within the county of (or within the sub- 
division thereof assessed by me, as the case may be), subject to 
assessment by me, and that the same has been assessed on the 
assessment book or books, equally and uniformly, according to the 
best of my judgment, information and belief, at its true value, and 
that I have faithfully complied with all the duties imposed on the 
deputy tax commissioner under the revenue laws; and that I have 
not imposed any unjust or double assessment through malice or ill- 
will or otherwise; nor allowed anyone to escape a just and equal 
assessment through favor or reward, or otherwise; so help me, 
God." But failure to take or subscribe to such an affidavit, or any 
affidavit, shall not in any manner affect the validity of any assess- 
ment. 

§ 23. Books to be delivered to county clerk — As soon as com- 
pleted, the assessment book or books, together with the maps, 
records, statements, and copies of any orders of the State Tax Com- 
mission, used or followed in making the assessment, must be de- 
livered into the custody of the county clerk for the use of the board 
of supervisors. Until the day set for the hearings before the 
boards of supervisors, as hereinafter in this act provided, the books 
shall be open to the inspection of all persons interested. Provided, 
that the State Tax Commission may for good cause shown ex- 
tend, but not by more than thirty days, the time for completing 
the roll of any county. 

§ 24. District tax commissioner's report to Commission — On 
completion of the assessment rolls in his district the district tax 



REPORT OP THE SPECIAL TAX COMMISSION, 153 

commissioner shall at once forward to the State Tax Commission 
a report, in such detail and form as the Commission shall pre- 
scribe, of his assessments. Under the transitional provisions of 
section sixteen of article two of this act this duty shall devolve 
on the deputy tax commissioner. 

§ 25. Penalty — Every tax commissioner who fails to complete 
his assessment rolls, or fails to transmit the report mentioned in 
the preceding section, shall forfeit the sum of one thousand dol- 
lars, to be recovered on his official bond, for the use of the Com- 
monwealth, in an action brought in the name of the Common- 
wealth by the Attorney General, when directed to do so by the 
State Tax Commission. 

§ 26. Names of purchasers — How entered — Lands once de- 
scribed in the assessment book need not be described a second 
time, but any person claiming the same and desiring to be assessed 
therefor, may have his name inserted with that of the person to 
whom such land is assessed. 

§ 27. Property in two counties — Property lying in two or more 
counties shall he assessed, as nearly as may be, in each county in 
that proportion which the part in each county bears to the whole. 
Ferries and toll bridges connecting two counties, other than ware- 
houses, wharves or other appurtenances in each county, together 
with the franchises thereof, shall be assessed one-half in each 
county. Where property lies in two assessment districts, the two 
district tax commissioners shall confer as to and determine the 
value. 

§ 28. Property discovered to be in other counties — Any dis- 
trict tax commissioner obtaining in any way information concern- 
ing property taxable in some other district or county shall at once 
notify the district tax commissioner of that district, and send him 
a description of the property, the name and address of the owner 
and any other facts pertinent to the assessment. A duplicate of 
such notice shall be sent to the State Tax Commission. For this 
service the district tax commissioner shall be allowed fifty cents 
for each parcel of property so reported and assessed. 

§ 29. Assessment roll the warrant for the collection of taxes 
— The assessment roll or book shall be the sole warrant for the 
collection of State and county taxes, and of district taxes to be 
collected by the sheriff as hereinafter provided and covered into 



154 REPORT OF THE SPECIAL TAX COMMISSION. 

the county treasury, and may be the warrant for the collection of 
municipal taxes, as hereinafter in this act provided. 

§ 30. Copies for cities — Cities and towns desiring to have their 
taxes collected on the basis of the county assessments may, with 
the consent and approval of the State Tax Commission, obtain 
copies of the assessment roll. Such copies shall be made by depu- 
ties of the district tax commissioners and shall be certified to by 
the district tax commissioner or his deputy. The city or town re- 
questing the copy shall pay into the State Treasury a sum equal 
to five cents per folio of one hundred words or figures. The money 
so paid is hereby appropriated to pay the expenses of copying the 
rolls at such rates not exceeding five cents per folio as the State 
Tax Commission shall allow, and shall be kept in a separate fund 
to be known as the "city assessment roll fund," and shall be paid 
out by the Auditor of Public Accounts on order of the State Tax 
Commission in the same manner as other payments are made of 
State money. 

; SUBDIVISION II. 

QUADRENNIAL REVALUATION OF REAL ESTATE. 

Duties of State Tax Commission and of Deputy Tax 

Commissioners. 

§ 1. Real estate revalued only once in four years — Once every 
four years the valuation and assessment of real estate shall be 
thoroughly revised and corrected. The values fixed at that time 
shall be used, unchanged, except as otherwise provided by law, 
as the assessed values of the real estate during the three succeed- 
ing years. The first quadrennial assessment shall be made as of 
September first in the year 1916. Provided, that, whenever the 
State Tax Commission shall determine that the value of real es- 
tate in any district or county or city or town has changed materially 
during the interval between the regular quadrennial revaluation 
of real estate herein provided for, the Commission may order a 
revaluation and assessment of such real estate to be made, and such 
revaluation shall be made at the time of the regular annual assess- 
ment of all property. 



REPORT OP THE SPECIAL TAX COMMISSION. 155 

§ 2. Rules and standard values, agricultural lands — The State 
Tax Commission shall formulate rules and issue instructions to 
district tax commissioners as to the manner in which the quadren- 
nial revaluation of real estate is to be made. It may cause the 
district tax commissioners to assemble in convention for discussion 
and instruction. 

The State Tax Commission may, for the purpose of obtaining 
uniformity of valuation for agricultural and other tracts of land, 
denominate grades or classes of land, and may, if it deem it ex- 
pedient to do so, fix standard values for the guidance of district 
tax commissioners. The Commission may, before any quadrennial 
assessment of real estate, cause its rules, grades, classes or standard 
values to be published, and public hearing as to the reasonableness 
of the rules, grades, classes, or values may be held in different parts 
of the State. 

Rules and basing values, city lands — The State Tax Commis- 
sion may likewise prescribe general rules, or fix "basing values, ,, 
for the purpose of securing a uniform valuation of the city and 
town lots. These rules and standard values, or "basing values,'* 
may be published and the Commission may hold public hearings 
for discussion of the rules and standard values within each city. 

Rules and standard values , improvements — The State Tax 
Commission may, if it deem it expedient, fix rules and standard 
values for different kinds and classes of improvements, both in 
the country and in cities, all to the sole end that assessments shall 
be uniform and equal at the true value of the lands and improve- 
ments. It shall have power to enforce its rules and standard values, 
and to require them to be followed by all district tax commis- 
sioners and their deputies. 

§ 3. District tax commissioners to search out values — The 

district tax commissioners shall, prior to the making of the first 
quadrennial revaluation of real estate, diligently examine the real 
estate within their districts and ascertain its value. They shall 
search out, through all available sources of information, the actual 
consideration paid when real estate is conveyed from one person 
to another. They shall ascertain the appraisements made of real 
estate in the case of estates passing under the inheritance laws, or 
appraisements made under condemnation proceedings, or for any 
other purpose. They shall examine, if deemed necessary, under 



156 REPORT OF THE SPECIAL TAX COMMISSION. 

oath, any real estate dealers, brokers, agents or other persons 
having knowledge of real estate values. They shall inquire into 
the rentals paid for real estate under lease and may demand and 
examine the lease contracts. They shall inquire into the products 
obtained from different classes of lands and the values and costs 
thereof. They shall make such further inquiries as the State Tax 
Commission shall prescribe. They shall keep a record in their own 
offices of all the facts and of the information obtained, as above pro- 
vided, and shall transmit copies of these records to the State Tax 
Commission. 

§ 4. District tax commissioners to keep records of values — 
Preparatory to each subsequent quadrennial revaluation of real 
estate after the first, the district tax commissioners shall continue 
the above investigations into real estate values all throughout the 
ensuing years between the revaluations and shall search out all 
evidences of changing values. They shall revise their records and 
send copies of the changes to the State Tax Commission. 

§ 5. District tax commissioners to fix values — Upon the basis 
of the information obtained by them, and in accordance with any 
instructions issued by the State Tax Commission, the district tax 
commissioners shall fix the true values of real estate and enter the 
same in their assessment rolls. The values so determined and 
entered shall be subject to review and equalization by the county 
boards of supervisors as hereinafter in this act provided, and by the 
State Tax Commission, and when so reviewed and equalized, shall 
be the assessed values for the ensuing four years, unless in the 
meanwhile the State Tax Commission shall have ordered a new 
revaluation of real estate to be made. 

SUBDIVISION III. 

• r 

Assessments By The State Tax Commission. 

§ 1. Property assessed by State Tax Commission — Every cor- 
poration organized under the laws of Kentucky whether doing 
business in this State or not, and every corporation organized under 
the laws of any other State or country, doing business in Kentucky, 
except religious, benevolent, and other associations, not organized 
for profit, whose property is exempt under the Constitution of this 
State, is hereby declared to possess a taxable franchise, and said 



REPORT OF THE SPECIAL TAX COMMISSION. 157 

franchise is property subject to taxation as any other property 
under the provisions of this act. But the franchises of banks and 
trust companies, are hereby declared to be covered by and included 
in the assessment of the shares of stock elsewhere in this act pro- 
vided for, and shall not be again assessed and taxed. The word "com- 
pany" as used in this subdivision, shall include any corporation, joint 
stock company, association, partnership, firm, or individual engaged in 
the business specified. 

All franchises; all property of railroads, including interurban 
and street railways, whether tangible or intangible; the shares of 
stock in all banks and trust companies; all property, tangible and 
intangible, of railroad bridge companies; all property, tangible and 
intangible, of turnpike companies; all property, tangible and 
intangible, of all telephone and telegraph companies, of all car com- 
panies, of all express companies, of all oil pipe line companies, of all 
gas companies, of all electric light companies, of all electric power 
companies, of all press dispatch companies, and also of all other 
corporations, companies, or associations, having or exercising any 
special or exclusive privilege or franchise mot allowed by law to 
natural persons, or performing any public service, whenever any 
of said companies have property lying in two or more counties; the 
franchises, but not the tangible property of public utilities operating 
in only one county; and all distilled spirits in bonded warehouses 
shall be assessed by the State Tax Commission acting as a central 
Board of Valuation and Assessment. 

The assessments so made shall be entered on a state assessment 
roll, hereinafter provided for, and shall also be apportioned by the 
State Tax Commission to the counties, cities and other taxing dis- 
tricts where the property is located and entered on the county, city 
and other assessment rolls. The State taxes thereon shall be paid 
directly to the State Treasurer upon order of the Auditor of Public 
Accounts, all local taxes thereon shall be paid as other local taxes 
are paid. No other assessment for general State or local taxation 
shall be made on property of this kind. 

§ 2. Reports to State Tax Commission — For the purpose of 
aidng the State Tax Commission in making ,these assessments, 
every corporation, company, or person owning or having control 
of any of the property named in section one of this subdivision 
including franchises and tangible property, shall file with the Com- 



158 REPORT OF THE SPECIAL TAX COMMISSION. 

mission a report in such form and in such detail as the Commission 
shall prescribe. These reports, except as otherwise specifically 
provided, shall be due September first, and delinquent ten days there- 
after in each year. 

The reports from the different classes of tax-payers herein re- 
quired to report shall contain the following information and such 
other information as the State Tax Commission shall deem neces- 
sary. The Commission shall prescribe the form of the report and 
may provide different forms for different classes of corporations 
and companies and shall furnish printed blank forms for the making 
of the report. 

(1) Reports on franchises — Every railway company or corpora- 
tion, and guarantee or security company, gas company, water com- 
pany, pipe line company, ferry company, bridge company, street rail- 
way company, express company, electric light company, electric power 
company, telegraph company, press dispatch company, telephone com- 
pany, turnpike company, palace-car company, dining-car company, 
sleeping-car company, chair-car company, and every other like com- 
pany, corporation or association, also every other corporation, com- 
pany or association having or exercising any special or ex- 
clusive privilege or franchise not allowed by law to natural 
persons, or performing any public service, also every corporation 
organized under the laws of Kentucky, whether doing business in this 
State or not, and every corporation organized under the laws of any 
other State or country and doing business in Kentucky, except banks 
and trust companies, elsewhere in this act provided for, whose fran- 
chises are hereby declared to be covered by the taxes otherwise com- 
puted; and except, further, religious, benevolent and other corporations 
not organized for profit, whose property is exempt under the constitu- 
tion of this State, and including further every person, firm, partner- 
ship or association exercising, or possessed of the right to exercise, any 
special or exclusive privilege or franchise granted by the Common- 
wealth, or by any county, city or other governmental authority, or per- 
forming any public service, shall, in addition to the taxes imposed on 
its tangible property by law, annually pay a tax on its franchise to 
the State and a local tax to the county, incorporated city, town or tax- 
ing district where its franchise may be exercised and shall file with the 
State Tax Commission a report on its special franchises and on its 
corporate franchise setting forth the following facts as of June thir- 



REPORT OF THE SPECIAL TAX COMMISSION. 159 

tieth in the year for which the report is made, or for the year ending 
June thirtieth as the case may be; viz: the name and principal place of 
business; the State or country under the laws of which it is organized; 
the name and post office addresses of its officers or agents in this State, 
and the name and post office address of the officer or agent who is 
charged with the duty of paying taxes ; the kind of business engaged 
in; the number and par value of the shares of capital stock, preferred 
or common, authorized ; the number of shares of capital stock issued 
and outstanding; the amount paid thereon in cash and the amount paid 
in in property or other considerations; the highest price at which any 
such stock has been sold or transferred by the company or by any 
stockholder at a bona fide sale within twelve months preceding the thir- 
tieth day of June in the year in which the statement is made; or if no 
sale has been made, the amount at which any bona fide offer of sale or 
of purchase was made; the amount of surplus funds and undivided 
profits and the value of all other assets; the amount of all indebted- 
,ness, showing separately the bonded debt, mortgages, notes and all un- 
secured or other indebtedness; the gross receipts and the net income, 
from all sources for twelve months, next preceding June thir- 
tieth in the year in which the statement is made; the ex- 
penses incurred for the same period; the amount, kind and 
true cash value of all tangible property taxable in this State, and 
where situated and assessed, or liable to assessment; the amount and 
true value of all non-taxable property owned; the assessed value of 
all property, other than the franchise, owned on the thirtieth day of 
June, whether acquired since assessment or assessed in the name of 
tlie company or person reporting as assessed on the last completed 
State or county assessment roll ; and any and all other facts which the 
State Tax Commission shall require. 

Inter-state companies — In the case of corporations or companies 
doing business in this State and in other states, except railroad com- 
panies, telegraph and telephone companies, car companies, express 
companies, and all other companies doing a public service, each com- 
pany shall report the total amount of business done both within and 
without this State and the amount done within this State, also what 
proportion, as nearly as may be ascertained, of its aggregate capital 
is invested and used within this State, what proportion of its 
employees are employed within the State, and how many agents or 
business correspondents it has within this State. 



160 REPORT OF THE SPECIAL TAX COMMISSION. 

Railroad and other companies to report additional items — Rail- 
road companies, telegraph and telephone companies, car companies, 
express companies, pipe line companies, and all other companies 
doing a public service, and doing business both within this State 
and in other States, shall, in addition, report the length of the entire 
lines owned and operated both within and without the State, and 
the length of the said lines within the State; also, the length of the 
lines owned but not operated and by whom operated, both within and 
without the State; also the length of the lines operated but not 
owned, and by whom owned, within and without the State; also 
the length of the lines owned and operated, owned but not oper- 
ated, and operated but not owned, in each county, city, incor- 
porated town, school district, or other political subdivision possessed 
of the power to levy taxes, in this State. 

Net and gross receipts — They shall also report the gross and net 
receipts within and without the State, including among the receipts 
within this State, that proportion of the receipts from interstate 
business reasonably attributed to this State. The gross receipts 
attributable to this State shall include the receipts from business 
beginning and ending in this State, and that proportion of the 
receipts from interstate business, which the mileage of the roads, 
lines, or routes, over which such interstate business is done within 
this State, bears to the total mileage over which such business is done. 

(2) Railroads to report on physical property — Railroad compan- 
ies operating with the State, including interurban and street rail- 
ways, shall, in addition to the facts required concerning the fran- 
chises, report the following facts concerning the physical property: 

a. The whole number of miles of railway owned and operated 
in the State, and, where the line is partly within and partly without 
the State, the whole number of miles within and the whole number 
of miles without, owned and operated by the company reporting; 

b. The whole number of miles owned but not operated, and 
by whom operated, both within and without the State; 

c. The whole number of miles operated but not owned, and by 
whom owned, both within and without the State. 

In regard to lines owned but not operated, or operated but not 
owned, a statement showing who under the terms of the lease or 
other operating is responsible for, or will assume, the payment of 
the taxes which may become a lien on the property. 



REPORT OP THE SPECIAL TAX COMMISSION. 161 

d. The number of miles of right of way, showing separately 
that used and unused, in this State, and in each county, city, incor- 
porated town, school district, or other political subdivision pos- 
sessed of the power to levy taxes, in this State, showing separately, 
also, the right of way for main line, and that for spurs, wyes, 
sidings, and other track appurtenances, and the width of all rights 
of way, with a general description thereof. 

e. A description of the road bed, rails, bridges, of any double 
track, of spurs, wyes, sidings, and other track appurtenances; of 
signal systems, telegraph lines, telephones, and other appliances 
for communication; of any terminal facilities within this State; 
all by convenient, or by recognized divisions, lines, or sections 
of the road, and by political subdivisions of this State, together with 
the value thereof per mile of rights of way in each political sub- 
division of this State. 

f. The depot grounds and buildings, other lands and buildings, 
or structures, all section houses, barns, warehouses, packing-houses, 
elevators, and other structures on or off the right of way, and the 
value thereof in each political subdivision of this State. 

g. The number, kind, and value of all rolling stock owned 
or hired and used on the entire system operated, and the proportion 
thereof used within the State, together with the value of each kind 
and class used on the entire system and of such used within this 
State. 

Statement to be filed but once — Whenever a complete statement 
of the above items, (a) to (g) inclusive, has once been filed to the 
satisfaction of the State Tax Commission, no annual restatement 
thereof need be filed thereafter, unless required by the Commission, 
but all changes which may be necessary to keep the statement up 
to date and true for each succeeding year, shall be reported 
annually. 

(3) Other public utilities to report tangible property — All tele- 
phone and telegraph companies, all car companies, all express com- 
panies, all oil pipe line companies, all gas companies, all electric 
light companies, all electric power companies, all press dispatch 
companies, and also all other corporations, companies or asso- 
ciations, having or exercising any special or exclusive privi- 
lege or franchise not allowed by law to natural persons, or 
performing any public service whenever any of said com- 

6. 



162 REPORT OP THE SPECIAL TAX COMMISSION. 

panies have property lying in two or more counties, shall report, 
in addition to the report above provided for, all their tangible prop- 
erty in such form and in such detail as the State Tax Commission 
shall prescribe, including all rights of way, poles, wires, pipes, con- 
duits, cables, switchboards, telephone and telegraph instruments, 
batteries, generators, and other electrical appliances, all exchange 
and other buildings and lands, canals, tunnels, ditches, flumes, 
aqueducts, dams, reservoirs, water sources and water rights, trans- 
formers, substations, gas holders, gas and electric generators, 
meters, gas and electrical appliances, oil tanks, power plants, pump 
ing plants, pipe lines, power houses, cars, and other rolling stock, 
trucks, wagons, horses, harnesses, and safes, and all other physical, 
tangible and intangible property of every sort and description. And 
all such companies, shall further, upon the demand of the State Tax 
Commission, furnish any map or other descriptions of its properties 
which said Tax Commission may require. 

(4) Local officials to report boundaries of districts — The State 
Tax Commission may require any state, county, city, or town, or 
district officials having knowledge of the same to file a statement 
or a map showing where any railroad or other public utility crosses 
the boundary when entering or leaving their counties, cities, towns 
or districts, and upon application of any railroad or other public 
utility shall furnish such railroad or other public utility with a copy 
thereof. 

(5) Banks to report what — It shall be the duty of the president, 
cashier or other chief officer of each bank or trust company, organ- 
ized under the laws of this State, or under the laws of the United 
vStates, or of any other state or country and located in this State, 
to make and deliver to the State Tax Commission a verified state- 
ment, in such form and detail as the State Tax Commission shall 
prescribe, showing the following facts : 

The name and post office address of the bank or trust company; 
the name of the president, cashier and directors and their post office 
addresses ; the number of shares of the capital stock ; and the par value 
thereof; the amount paid in on the capital stock; the amount of 
the surplus and of the undivided profits; the market value of each 
share of stock; the amount and value of all real estate situated in this 
Commonwealth, held and owned by the bank or trust company and 
the assessed value thereof; all the assets and liabilities; the loans and 



REPORT OF THE SPECIAL TAX COMMISSION. 163 

deposits; and such other information as the State Tax Commission 
shall require. The items shall all be reported as of the close of busi- 
ness on the first day of September or on the nearest business day there- 
to. Provided, that, in each year when there is to be a revaluation of real 
estate affecting any real estate owned by any bank, that bank may post- 
pone reporting the assessed value of such real estate until the revalua- 
tion shall have been completed, but it must, in the report above pro- 
vided for, state the true value of, and give a description of the real 
estate. 

(6) Railroad bridge companies to report — Railroad bridge com- 
panies shall report, in addition to the information required in the 
report on their franchises, the following information concerning 
their tangible property. The location of the bridges, a description 
of the structure, and of all rights of way leading thereto, all other 
real estate owned, including all buildings and structures, all machin- 
ery and all personal property, the railroad companies using the 
bridge or bridges and the terms of such use, and such other items as 
the State Tax Commission shall prescribe. 

(7) Turnpike companies to report — Every turnpike company 
shall, in addition to the report required on the franchise, make a 
report on the tangible property, showing the whole length of the 
road, the length of the road in each county, the width of the right 
of way, all real estate owned, all buildings or other structures, 
machinery and tools and such other matters and things as the State 
Tax Commission shall require. 

(8) Reports on spirits — Every owner or proprietor, whether a 
corporation, a partnership, or other, of a distillery bonded ware- 
house in which distilled spirits are stored shall, between the first 
day of September and the first day of October of each year, report 
the quantity and kind of spirits in such warehouse on the first day 
of September in the year in which the statement is required to be 
made, the dates when the spirits were made, the county, city, town 
or taxing district in which the warehouse is situated, whether or 
not the United States Government tax has been paid thereon, if not, tne 
date of expiration of the bonded period, the fair cash value of the 
spirits, estimated at the price it would bring at a fair voluntary 
sale, and such other facts as the State Tax Commission may require. 

§ 3. Verification — All statements or reports, required under 
section two above, shall be verified. In the case of a corporation, 



164 REPORT OP THE SPECIAL TAX COMMISSION. 

the verification shall be by the president, cashier, secretary, 
treasurer, manager, resident agent, or some other chief and respons- 
ible officer, receiver, assignee, trustee, administrator, executor or 
other person in control, whose affidavit shall be satisfactory to the 
State Tax Commission. In the case of individuals, firms or partner- 
ships, by the owner or a member of the firm or partnership. 

§ 4. Assessment how made in case of failure to report — If any 
company or person, required to make the report provided for in 
section two of this subdivision, shall, after demand therefor, fail 
or refuse to furnish the State Tax Commission, within the time 
prescribed in this act, the verified report required to be made, the 
Commission shall make a note of such failure in the assessment roil 
of the State hereinafter in this act provided for, and shall make an 
estimate, from the best information it can obtain, of all matters 
and things required to be reported, and shall make an assessment of 
the franchises, shares, or other property to be assessed. This 
Assessment shall be known, for convenience as an arbitrary assess- 
ment, but shall be as fair and equitable as possible. The Commis- 
sion shall send notice of this assessment to the last known post 
office address of the company or person assessed and shall allow 
the company or person ten days in which to show cause why the 
assessment should not be final. After the lapse of ten days the 
assessment shall be final, unless cause for correction be shown. 

Penalty for failure to report — If in any succeeding year the 
company or person again fail or refuse to report, the same procedure 
shall be followed, and a penalty equal to the tax shall be added 
thereto to be collected in the same manner as the tax is collected. 
For each subsequent failure, the tax and penalty shall be an amount 
equal to the tax plus twice the penalties imposed the preceding 
year. 

Company's penalties — Any company wilfully failing or refus- 
ing to make and furnish any report prescribed in this act, or render- 
ing a false or fraudulent report, shall be guilty of a misdemeanor 
and subject to a fine of not less than three hundred dollars and not 
exceeding five thousand dollars for each offense. 

Officers' penalties — Any person required to make, render, sign, 
or verify any report, who makes any false or fraudulent report, 
with intent to defeat or evade the assessment required by this 
act to be made, shall be guilty of a misdemeanor, and shall for each 



REPORT OF THE SPECIAL TAX COMMISSION. 165 

such offense be fined not less than three hundred dollars and not 
more than five thousand dollars, or to be imprisoned not exceeding 
one year in the county jail of the county where said report was veri- 
fied, or be subject to both said fine and imprisonment, at the discre- 
tion of the jury. 

§ 5. How franchises are to be assessed — In making the assess- 
ment of franchises, the State Tax Commission shall, from the 
reports of the companies and persons required to be filed, as pro- 
vided in this subdivision, or from any other available sources of 
information, fix, according to its best judgment, the value of the 
aggregate capital stock employed by the company or person within 
this State, whether such capital stock be represented only by the 
shares of common or of preferred capital stock in the narrower 
sense of the term "capital stock", or also by bonds, notes, or other 
securities used to obtain funds, or capital stock in the broader sense 
of that term, used in the conduct of the business. 

Determination of capital stock — In thus determining the value 
of the aggregate capital stock, the State Tax Commission may con- 
sider the prices at which the shares of capital' stock, the bonds or 
other securities were sold or transferred, or at which they have been 
quoted for sale or purchase. It may also consider the earnings of 
the company available for dividends, the interest promised and that 
being paid, or available to be paid, upon bonds, and all other profits 
or receipts. It may consider also any other related facts pertinent 
to a determination of the true value of the aggregate capital 
stock. It shall especially consider the fact of incorporation, the 
ownership, enjoyment, or exercise of any special privileges, patents, 
or other rights, and the existence of contracts and business agreements 
and business connections and other similar factors, contributing to the 
value of the aggregate capital stock. 

Interstate business of non-utility companies — In the case of cor- 
porations or companies other than railroads, telephone and tele- 
graph companies, car companies, express companies, pipe line com- 
panies, and other public service companies doing business in other 
states as well as in this State, the State Tax Commission shalt 
determine the value of that part of the capital stock which is used 
in this State. In making this determination, the State Tax Com- 
mission may consider : the gross and net receipts within and without 
the State, including among the receipts within this State that proportion 



166 REPORT OF THE SPECIAL TAX COMMISSION. 

of receipts from interstate business reasonably attributable to this 
State; the actual investment of capital within this State, in land, 
buildings, machinery and other property; the number of employees, 
agents, business correspondents and the like within this State; 
and any other facts pertinent to a fair and equitable apportionment 
of the capital stock to this State. 

Interstate public utilities — In the case of railroads, telegraph and 
telephone companies, car companies, express companies, pipe line 
companies, and other public service companies, the road, lines, and 
routes of which extend beyond the State, the State Tax Commission 
shall fix the value of the aggregate capital stock of the company, both 
within and without the State, and shall determine what proportion 
thereof is used within the State. In determining the value of the 
capital stock used within this State, the Commission may consider 
the ratio of the number of miles of road, lines, or routes operated 
within the State to the total number of miles of road, lines or routes 
operated both within and without the State. It may also consider the 
ratio of gross receipts within the State to the total gross receipts within 
and without the State. In considering gross receipts, it may attri- 
bute to this State all receipts from business beginning and ending 
in this State, and that proportion of the gross receipts from inter- 
state business which the mileage of roads, lines, or routes, over 
which such interstate business is done within the State, bears to the total 
mileage over which such business is done. It may also consider what 
allowance or deduction, if any, should be made for parts of the capital 
stock invested in other roads, lines, or routes not operated as part of the 
system entering this State, or which is invested in property or used 
in business of another character, or otherwise not representing any 
part of the system operated in direct conjunction with the roads, 
lines or routes entering this State. It may also consider what addi- 
tions should be made to the portion of the capital stock deemed to 
be used in this State, or to portion outside the jurisdiction of the 
State for plants, works, or other special facilities within, or, respec- 
tively, without the State, for differences in the original cost, present 
value or earning power of different parts of the system. It may 
also consider any other facts pertinent to a fair and equitable deter- 
mination of the proportion of the aggregate capital stock used within 
this State. 

Kentucky companies operating outside the State — If any com- 



REPORT OF THE SPECIAL TAX COMMISSION. 167 

pany of the kinds named in this section being a company organ- 
ized under the laws of this State have all its rails, lines, or routes 
outside of this State, the State Tax Commission shall fix the value 
of its entire capital stock as hereinbefore provided, and apportion 
to this State for taxation therein the proper proportion and not less 
than one per cent of its said capital stock, and the amount so appor- 
tioned shall be the value of its intangible property, including its 
corporate franchise, stocks, bonds, securities and choses in action, 
subject to taxation in this State and in the county, city, town and 
district where its principal place of business in this State may be 
located. 

Franchises — How measured — From the value of the aggregate 
capital stock of each company as determined by the State Tax Com- 
mission, there shall be subtracted the assessed value of all tangible 
property taxed in this State, whether assessed by its deputies, the 
district tax commissioners, or by the State Tax Commission itself, 
and the value of all non-taxable property in this State belonging 
to the company. The difference or remainder shall be considered 
the value of the intangible property of the company, or the value 
of the franchise as the term "franchise" is used in this act. 

§ 6. Commission to assess physical property — The State Tax 
Commission shall each year value and assess the physical or tangible 
porperty within this State of all the corporations, companies enumer- 
ated in section one of this subdivision and shall determine the amount 
thereof in each political subdivision of the State having taxing power. 
In determining the value of the physical property, the State Tax 
Commission shall be guided by the reports required to be made 
under this act, but it may take into consideration any and all other 
sources of information available. It may inspect the property and 
may send its duly accredited representatives to do so. The Rail- 
road Commission shall grant to the State Tax Commission access 
to any and all of its files and records bearing upon the value ot 
railroads. 

§ 7. Assessment of bank shares — The shares of the capital stoctf 
of all banks and trust companies, doing business in this State, shall 
be subject to taxation, both for state and local purposes, in the same 
manner and at the rates as other property is taxed, and upon the 
basis of valuation and assessment hereinafter in this section pro- 
vided for. 



168 REPORT OF THE SPECIAL TAX COMMISSION. 

The State Tax Commission shall each year value and assess the 
shares of the capital stock of all banks and trust companies doing 
tusiness in this State. The shares of the capital stock of the banks 
shall be assessed and taxed in the city or town where the bank is 
located and not elsewhere. The assessment and taxation of the 
shares of stock of banks organized under the laws of the United 
States shall not be at greater rate than is assessed upon the shares 
of stock of other banks and trust companies in this State. In making 
the assessment, the Commission shall, first, determine the actual 
value of the shares, and shall then deduct therefrom the assessed 
value of any real estate situated in this State and owned by the 
bank or trust company in its own right. The shares of the capital 
stock of all banks and trust companies shall be assessed to the 
owners or holders thereof. But it shall be sufficient to, describe the 
owners or holders as the "owners or holders of the shares of stock 

in the Bank of ", inserting the name of the bank. The 

banks shall be liable for all taxes on the shares and shall act as the 
agent of the shareholders for reporting the value of the shares, 
and shall pay the taxes on behalf of the share-holders. 

In the case of banks not having shares of capital stock, of 
agencies or branches of banks not incorporated under the laws oi 
this State and of any analogous banking houses, the State Tax 
Commission shall assess the moneyed capital used in this State by 
each such bank, agency, branch, or other banking house. The 
shares of capital stock of solvent banks in liquidation shall be 
assessed as the shares of other banks are assessed. The shares 
of insolvent banks in liquidation shall be assessed at, as nearly as 
may be, the amount that will be realized by the share-holders after 
liquidation has been completed. 

§ 8. The State assessment roll — On or before January first 
in each year, the State Tax Commission shall make an assessment 
roll, or book or books, to be known, for convenience, as "the State 
Assessment roll," and shall enter therein the names of the tax- 
payers whose property has been assessed by them as provided in 
section one of this subdivision, together with their last known office 
addresses, and the kind and assessed value of the property assessed 
by it. It shall deliver the State assessment roll when completed 
to the Auditor of Public Accounts, who shall extend the State tax 
against the property shown therein. 



REPORT OF THE SPECIAL TAX COMMISSION. 169 

§ 9. Assessments apportioned to counties — All assessments 
made by the State Tax Commission shall, by that Commission, 
be apportioned to the counties in which the property so assessed 
has its situs. The State Tax Commission shall, on or before Decem- 
ber first in each year, certify to each district tax commissioner, 
the names of the tax-payers whose property has been assessed and 
apportioned to the counties within his district, or county, together 
with the last known post office addresses of the tax-payers, the 
kind and assessed value of the property assessed by the Commission, 
and such other details as the Commission shall deem necessary. 
The district tax commissioner shall enter the assessments so certi- 
fied to him in a part of the assessment roll, book or books of the 
county, to be. designated "the roll of property assessed by the State 
Tax Commission," and shall segregate the same to the different 
taxing districts within the county. The county clerk shall, as here- 
inafter in this act provided, extend against this property all taxes 
to which it is subject, save and except the State tax, and he shall 
make no entry of the State tax on this part of the roll. In making 
the apportionment to the counties, cities, or other taxing districts, of 
the assessment of the franchises of railroads and other public service 
corporations, companies, and associations named in Section one of this 
subdivision, when the same are operating or have property lying in 
two or more counties, the State Tax Commission shall make that ap- 
portionment on the basis of the miles of rails or lines within each 
county, city, or other taxing district. The tangible property of such 
corporations, companies, or association, except rolling stock and simi- 
lar movable tangible property, shall be assessed where it lies. Rolling 
stock and similar movable tangible property shall be apportioned on a 
mileage basis over the lines where it is used. The assessments so made 
and apportioned, and no other, shall be the basis of taxation of said 
franchises, in the counties, cities, and other taxing district. 

§ 10. Notice of time for hearings — On on before the first day 
of December in each year, the State Tax Commission shall com- 
plete the assessment and shall publish a notice in one daily paper 
published at the State Capital, one daily paper having a general 
circulation in the eastern part of the State, one having a general 
circulation in the central part of the State, and one having a general 
circulation in the western part of the State, stating that it has com- 
pleted the assessment of property to be assessed by the State Tax 



170 REPORT OF THE SPECIAL TAX COMMISSION. 

Commission and that the assessment roll thereof will be delivered 
to the Auditor of Public Accounts on the first day of January, 
and will on that day day certify the assessments to the tax commis- 
sioners for insertion in the county rolls, and that if any corpora- 
tion, company, person, firm, partnership, or association is dissatis- 
fied with the assessments made by the Commission, it may at any 
time before the first day of December apply to the Commission 
to have the same corrected in any particular. The Commission 
shall have power at any time before the first day of December 
to correct the State assessment roll and to raise or lower any assess- 
ment therein of its own motion, or on application as above provided, 
if in its judgment, the evidence presented or obtained warrants such 
action. 

...... i, . ,.l U ... 

ARTICLE IV. 
REVIEW AND EQUALIZATION. 

SUBDIVISION I. 
County Board of Supervisors. 

§ 1. Appointment of boards of supervisors— In every year in 
which a quadrennial revaluation of real estate is to be made, or in 
any year when a revaluation of real estate has been ordered by the State 
Tax Commission, the county judge of each county concerned shall, 
at the November term of the court, appoint five intelligent, discreet 
housekeepers, who are owners of real estate and who reside in 
different portions of the county, to constitute the board of super- 
visors of assessments for the county. In counties in which there 
is a city of the first or second class, he shall appoint three addi- 
tional persons from each such city who shall be residents of 
different wards therein; and in counties in which there is a city 
of the third or fourth class, he shall appoint two additional persons 
from each such city who 'shall be residents of different wards 
therein, and the persons so appointed from the cities shall, with 
the other five above provided for, constitute the board of super- 
visors of assessments for such counties. 

§ 2. Boar is of supervisors for review of personal property — 
In years when no revaluation of real estate is to be made, the county 



REPORT OF THE SPECIAL TAX COMMISSION. 171 

judge may, if he deem it necessary, appoint a similar board of 
supervisors of assessments, and he must do so when requested to 
do so by the State Tax Commission, or by the fiscal court of the 
county or by that board, body, commission or court which may in 
any county take over and exercise the functions usually exercised 
by the fiscal court. 

§ 3. Sheriff to serve appointments — The clerk of the county 
court shall make as many copies of the order appointing such super- 
visors as there are supervisors appointed and one more, an<f deliver 
same to the sheriff of the county, who shall deliver a copy to each 
supervisor at least twenty days before the first day of January 
thereafter and make due return thereof to the clerk of the county 
court. 

§ 4. Oath supervisors shall take — The supervisors, before they 
enter upon the discharge of their duties, shall take the following 
oath : 

"You swear that you will, to the best of your ability, discharge 
the duties required of you as supervisor of tax, and that, in each 
instance where the property has not been assessed at its fair cash value, 
estimated at the price it would bring at a fair voluntary sale, you 
will increase or decrease the value and fix the value at what you 
believe the property would bring at a fair voluntary sale." 

§ 5. Penalty for failure to attend sessions — The failure to be 
in attendance promptly on the day fixed for the session of the 
board to begin shall, without a reasonable excuse, subject the 
person or persons so failing to a fine of not exceeding twenty-five 
dollars; and the vacancy or vacancies so created, or from any other 
cause, shall be filed by the county judge. 

§ 6. Meeting of supervisors and duties — The county boards of 
supervisors of assessments shall convene in public session at the 
county seat of their respective counties on the first Monday in 
January of the year succeeding their appointment. The county 
clerk shall act as secretary of the board. At the time of their 
convening, the county clerk shall lay before the county board of 
supervisors the assessment roll or books, together with the maps, 
records, statements and copies of any orders of the State Tax Com- 
mission used or followed by the district tax commissioners in 
making the assessments. The board of supervisors shall examine 
the books and ascertain: 



172 REPORT OP THE SPECIAL TAX COMMISSION. 

(1) Whether all property subject to taxation has been entered 
thereon, and whether any has been assessed more than once; (2) 
whether all the requirements of the law with respect to assessments 
have been complied with; (3) whether the real estate, and other 
property has been valued according to law and the true values 
entered in the assessment roll. 

§ 7. Supervisors' powers — The board of supervisors shall have 
power, and it shall be its duty: 

(1) To order the district tax commissioner to enter in the assess- 
ment roll, and to fix the value of, any property found to have been 
omitted; (2) to order the district tax commissioner to correct any 
erroneous entries, to cancel duplicate assessments and to make the 
roll conform to the law; (3) to hear the complaints of any tax- 
payers claiming to be aggrieved by any unjust or unequal assess- 
ments, and after consulting with the district tax commissioner or his 
deputy, may order the tax commissioner to raise or lower the assess- 
ments made of the property of the taxpayers appearing and com- 
plaining, but no taxpayer who has failed, refused, or neglected to file 
with the tax commissioner a sworn statement of his property shall 
be entitled to be heard, nor shall his assessment be reduced; (4) to 
raise, on its own motion, any or all assessments found in the rolls, but 
no assessment shall be lowered, save as provided in sentence (3) im- 
mediately above; (5) to summon witnesses and to examine them under 
oath. Any person who shall wilfully fail to obey the summons of the 
board, or shall refuse to testify before it when required, shall be deemed 
guilty of a misdemeanor and, on conviction, be fined not less than 
twenty-five dollars nor more than one hundred dollars for each 
offense. 

All orders issued' to the district tax commissioner shall be en- 
tered in the minutes of the board and duplicate copies thereof trans- 
mitted by the county clerk, one to the district tax commissioner 
and another to the State Tax Commission. The orders shall be 
numbered, and when making the entries or corrections ordered by 
the board, the district tax commissioner shall make a marginal 
reference to the order complied with. In all its actions, the board 
of supervisors must conform to the rules and orders of the State 
Tax Commission in the same manner as is required in this act of 
the district tax commissioners. The district tax commissioner 
shall comply with all orders of the board. But the State Tax 



REPORT OF THE SPECIAL TAX COMMISSION. 173 

Commission may, on appeal, annul any order, and in that event 
the district tax commissioner shall regard the order as void. 

§ 8. Review of personal property — In the years in which the 
regular quadrennial revaluation of real estate is to be made, or 
any special revaluation of real estate thas been ordered by the 
State Tax Commission in any county, city or town, the boards 
of supervisors shall devote special attention to the values of real 
estate and make every effort to bring about a full assessment 
thereof. In all other years, any boards of supervisors which may 
be appointed and convene shall make no changes in real estate 
values, save of new improvements added, but shall confine their 
orders to the values placed upon personal property and new im- 
provements. 

§ 9. Sessions of supervisors — In each year when a revaluation 
of real estate is to be made, the board of supervisors shall hold 
two sessions with an interval of two weeks between them; In all 
other years there shall be but one session. In counties having a 
population of less than twenty thousand and not containing a city 
of the first, second, third or fourth class, the first session, or the 
only session, shall continue not less than two, nor more than six 
days; and in counties having a population of twenty thousand or 
more, and not containing a city of the first, second, third or fourth 
class, the board shall continue in session not less than two nor 
more than eight days; and in counties containing a city of the 
first class, the board may remain in session not to exceed twenty 
days; and in counties containing a city of the second class, the 
board may remain in session not to exceed fifteen days; and in 
counties containing a city of the fourth class, the board may re~ 
main in session not to exceed ten days. The second session shall, 
in counties having a city of the first or second class, continue not 
less than one nor more than ten days, and in all other counties, not 
less than one nor more than five days. 

§ 10. County clerk to notify of changes' — It shall be the duty 
of the county clerk to notify all taxpayers, whose assessments 
have been ordered made or changed, of the assessment or change 
and the amount thereof. Such notices shall be sent by mail to the 
last known postofnce address of the taxpayer. If the address be 
not known, the sheriff shall serve them. The cost of mailing the 
notices, or of service, shall be paid out of the county levy. 



174 REPORT OF THE SPECIAL TAX COMMISSION. 

§ 11. Appeal from decision of supervisors — Taxpayers dissatis- 
fied with the action of the county board of supervisors, or who 
by reason of the shortness of the sessions of that board have not 
been heard, shall have the right to appeal to the State Tax Com- 
mission. Such appeals must be presented before the first Mon- 
day in February; any later appeals are hereby barred. The ap- 
peal may be in writing and sent by mail, in which case it must 
be verified under oath, or it may be presented in person. The 
appeal may be heard by any district tax commissioner, or his 
deputy, and the facts obtained at the hearing shall be forwarded 
by the district tax commissioner to the Commission. The Com- 
mission shall decide the appeal and its decision shall be final. But 
no taxpayer who has failed, neglected or refused to file a sworn 
statement of his property shall have the right of appeal, nor shall 
any such appeal, if attempted to be made, be granted or heard. 

§ 12. Certificate of supervisors — The board of supervisors shall 
keep a record of the proceedings and of all formal orders issued. 
They shall annex their certificate to the assessment roll, book or 
books, certifying that they have examined the same, and approve 
them, when amended or corrected as ordered, and shall return 
them with the record of their proceedings to the county clerk as 
soon as their last session be over. 

§ 13. Compensation of supervisors — The supervisors and the 
clerks shall be allowed for their services 'four dollars per day for 
each day they shall be necessarily employed, to be paid one-half 
out of the State Treasury and one-half by the county. There is 
hereby appropriated for each year out of any money in the State 
Treasury not otherwise appropriated, the sums necessary to pay 
the above compensations computed as above directed. The clerk 
shall certify to the county court the approval of the assessment 
roll, book or books, and the number of days of the sessions and 
the amount due for compensation. The county court shall enter 
the facts of record and shall certify the same to the State Tax 
Commission, who, if it finds that the proceedings were in order, 
shall transmit the claims of the supervisors and clerks against the 
State to the Auditor of Public Accounts, who shall pay the same in 
the same manner as other legal claims against the State are to be 
paid. The county court shall also certify the claims of the super- 



REPORT OF THE SPECIAL TAX COMMISSION. 175 

visors against the county to the fiscal court 'for payment and said 
court shall provide for their payments. 

§ 14. Irregularities not to invalidate- — Any informality or ir- 
regularity in the discharge of their duties by the supervisors, and 
any failure of duty on their part, shall not render any assessment 
invalid. 

§ 15. Tax Commission may sit with supervisors — The State 
Tax Commission may send one or more of its members to attend 
any session of the board of supervisors, or may send its accredited 
representative to attend such session or sessions, and such mem- 
bers or representatives shall be empowered to sit with the board 
of supervisors, and to take part in its proceedings, but shall not 
have a vote. 

§ 16. Books and records returned to clerk — Upon completion 
of the work of the board of supervisors, the assessment roll, book 
or books shall be taken in custody by the county clerk, and all 
maps, statements, orders of the State Tax Commission or other 
records shall be returned to the district tax commissioner. 

§ 17. Supervisors not to raise State assessments — No board 
of supervisors shall raise or lower any assessment of property sub- 
ject to assessment by the State Tax Commission and apportioned 
to the counties as provided in subdivision three of article three of 
this act. ■ ! . , „ 

1 'I . I - '■ I - i ! . -.i 

i 

1 < SUBDIVISION II. " ' : j 

The State Tax Commission to Act as State Board of Equalization. 

§ 1. State Board of Equalization — How constituted — The 

State Tax Commission shall constitute the State Board of Equaliza- 
tion. It shall have power, at the time o>f the session provided for 
in the next section, to raise or lower the assessed value of the prop- 
erty assessed on the rolls of any county, either as a whole or by 
classes. But it shall not have power to raise or lower any indi' 
vidual assessment, after the same has been approved by the board 
of supervisors, save on appeal from rulings of a county board of 
supervisors as provided for in subdivision 1 of this article. 

§ 2. Meetings — The State Tax Commission shall convene at 
the State Capitol as the State Board of Equalization on the sec- 



176 REPORT OF THE SPECIAL TAX COMMISSION. 

ond Monday in February in each year, and remain in continuous 
session, for trie purpose of equalizing the assessment of property 
between counties throughout the State, for thirty days, or longer, 
if deemed necessary by the board. It may adjourn its sessions at the 
State Capitol to reconvene in any county. 

§ 3. To examine assessments — At this session, the State Board 
of Equalization s'hall carefully examine the reports of the district 
tax commissioners as to the valuations of property in each county, 
and shall examine the orders made by the county boards of super- 
visors and shall compare them with all data on file in their office 
or obtainable from any source, and shall determine whether the 
assessments conform to the true value in money of the property 
assessed. 

§ 4. Percentage to be added or subtracted — Equalization 
shall be accomplished by directing that a given percentage shall 
be added to or subtracted from the assessed value of all the prop- 
erty on the rolls of any county or added to or subtracted from 
the assessed value of any class of property. Provided, that no per- 
centage shall be added to or subtracted from money or other cash 
items on the roll. 

§ 5. Percentages on real estate— Only in those years when a 
revaluation of real estate has been made, shall any percentage be 
added to or subtracted from the assessed value of real estate in 
any county, except new improvements, but in those years the State 
Board of Equalization shall give special examination to the com- 
pleted assessments of real estate. 

§ 6. Notifications to counties of changes — When it is contem- 
plated by the State Board of Equalization that it will be necessary 
to raise the assessed value of property in any county, it shall give 
public notice in that county, in such manner as it shall deem suf- 
ficient, to the taxpayers of the county, and to the county court of 
the county, of the contemplated action, and shall set a day and 
fix a place for a hearing. At that time and place any taxpayer of 
the county, or any officer thereof, may appear and shall be heard. 
The county court may appoint not to exceed five witnesses or ac- 
credited representatives of the county to appear at sudh hearings. 
The compensation and expenses of such witnesses or representa- 
tives shall be paid by the county. 

§ 7. When no equalization is deemed necessary — If the: §'taoke. 



REPORT OF THE SPECIAL TAX COMMISSION. 177 

Tax Commission shall be satisfied that in any one year, through 
its supervision of the work of the district tax commissioners of 
the county boards of supervisors, it has already brought about 
substantial equality in the assessments throughout the State, it 
may, on the first day of its session as the State Board of Equaliza- 
tion or within three days thereafter, by notice given to the county 
court of each county, declare that mo percentages will be added 
to or subtracted from the assessed values of any county on the 
board's own motion. But any county or any taxpayer within any 
county, believing the assessed values in any county to be higher 
or lower than those of any other county, may within ten days after 
the day of the issue of the notice of non-intention to equalize, de- 
mand a hearing, and said hearing shall be granted and a day and 
place fixed therefor. In such case the assessed valuation of each 
and every county shall be subject to equalization as though the 
notice of intention to make no changes had not been issued. 

§ 8. Certificate of changes to county — Whenever the State 
Board of Equalization shall have raised or lowered the assessed 
valuation of property in any county, or any class of property m 
any county, it shall prepare a verified certificate of such action 
and forward the same to the county clerk of the county affected. 
Upon receipt of this certificate, the county clenk shall at once cor- 
rect the assessment roll by adding or deducting the percentage 
oi dered from each and every assessment to which the action of 
the State Board of Equalization applies. 

When the State Board of Equalization has completed its work, 
it shall notify also all counties whose assessments were not 
changed of that fact. 

§ 9. Certifications to auditors — Immediately upon the comple- 
tion of its work and not later than April first, in each year, the State 
Board of Equalization shall certify to the Auditor of Public Ac* 
counts the final equalized value of the property assessed in each 
county in the State. The Auditor of Public Accounts shall at once 
compute the amount of taxes due from each county on the prop- 
erty assessed upon its rolls and shall cause to be printed and sent 
to each county clerk, each county court and each fiscal court, or its 
successor in powers, a statement showing the assessments made 
on property within each county and the State taxes due therefrom. 
In its report to the Auditor of Public Accounts the State Board of 



178 REPORT OF THE SPECIAL TAX COMMISSION. 

Kqualization may give the assessed property by counties in such 
classes or in such detail as it shall deem necessary and the Auditor 
of Public Accounts shall publish his statement in substantially the 
same detail. 

ARTICLE V. 

DUTIES OF THE COUNTY CLERKS IN RELATION TO 

THE REVENUES. 

! 

§ 1. County clerk to check the roll — The county clerk shall, 
after the examination and approval of the assessment roll by the 
board of supervisors attesting the accuracy of the extensions and 
additions on said books, make the additions for each of the columns 
or lines required to be added and determine the aggregate value 
or other totals in said assessment roll. He shall also make a re- 
capitulation on blanks to be furnished by the Auditor of Public 
Accounts and record a copy of said recapitulation in said assess- 
ment roll with his official seal attached, and send another copy 
to the Auditor of Public Accounts. It shall be his duty to see that 
all footings, additions and recapitulations are correct. 

He shall anuually make out, for the use of the sheriff or col- 
lector, in a book, a correct list of all tithes, and shall deliver the 
same to the sheriff or collector on or before the first day of March, 
and take his receipt therefor. For attesting the accuracy of the 
extensions and additions on said book and for making the additions 
of each column, and for making out said list of tithes for the sheriff, 
and for computing and extending the amount of the taxes due, 
the county clerk shall be allowed annually, out of the State Treas- 
ury, three (3) cents for each tax computed against any taxpayer, 
and also for each line calling for the total values and total taxes. 
The clerk shall present his account to the county court, verified 
by his affidavit, which shall be approved and allowed by the court, 
if found correct, and duly certified to the Auditor, who shall draw 
his warrant on the Treasurer for the amount, and for making out 
said recapitulation sheet and recording the same in the tax book, 
said clerk shall receive two (2) cents for each line across the page 
thereof, including the last number of total values and the same 
compensation for copy certifying said recapitulation sheet to the 



REPORT OP THE SPECIAL TAX COMMISSION. 179 

Auditor, to be ascertained by the Auditor and paid by the Treas- 
urer on the warrant of the Auditor. It shall be the duty of the 
county clerk, after the approval of the tax books by the board of 
supervisors, to mark with a perforating punch each line of said 
tax book and the recapitulation sheet, or sheets, upon which a list 
is not already entered. The fiscal court shall furnish the clerk 
with said punch. The failure of the county clerk to comply with 
this provision will subject him to a fine of fifty ($50.00) dollars. 

§ 2. County clerk's preliminary report to State — The county 
clerk must, on or before February fifteenth in each year, prepare from 
the assessment roll of his county, as corrected by the district tax com- 
missioner under the orders of the board of supervisors, a statement 
in duplicate, showing in separate columns : 

(1) The number of acres of land. 

(2) The total value of all property. 

(3) The value of all lands. 

(4) The value of all improvements on land. 

(5) The value of personal property in such classes as the 
State Tax Commission shall prescribe. 

(6) The assessed value of all property sold for delinquent 
taxes. 

(7) Such other items as the State Tax Commission or the 
Auditor of Public Accounts shall prescribe. 

As soon as it is prepared, the clerk shall transmit, by mail, one 
copy thereof to the Auditor of Public Accounts and the other to 
the State Tax Commission. 

§ 3. County clerk to complete the roll — As soon as the county 
clerk receives f~om the State Tax Commission a statement of the 
changes ordered to be made by it, when acting as a State Board 
of Equalization, in the assessment roll of the county, he must make 
the corresponding changes in the assessment roll of his county 
by entering the same in a column to be provided with a proper 
heading in the assessment book or books. In computing the as- 
sessments so changed, any fractional sum when equal to or more 
than fifty cents shall be counted as one dollar, and any less than 
fifty cents shall be omitted, so that the value of any separate as- 
sessment shall contain no fraction of a dollar. 

§ 4. County clerk to extend the taxes — The county clerk must 
then compute and enter in a separate money column in the assess- 



180 REPORT OF THE SPECIAL TAX COMMISSION. 

ment book or books, the respective sums, in dollars and cents, re- 
jecting all fractions of a cent, to be paid as a tax on the property 
therein enumerated, showing also the total amount of all taxes, 
and the total value of all property as assessed and equalized. 

§ 5. County clerk's oath — On or before June first in each year 
the county clerk must deliver the corrected assessment book ot 
books, with the taxes entered therein, to the sheriff, with an af- 
fidavit attached thereto, and subscribed by him substantially as 
follows: 

"I, , county clerk of the county of 

, do swear that I have examined the as- 
sessment book or books of this county and find that they are prop- 
erly corrected to conform to the action of the board of supervisors, 
and that I have further corrected them to conform to the action 
of the State Tax Commission; that I have reckoned the respective 
sums due as taxes, and have added up the columns of valuation, 
taxes, and acreage as required by law." 

§ 6. County clerk to charge the sheriff with taxes and hand 
final report to Auditor — On delivering the assessment book or 
books to the sheriff, the county clerk must charge the sheriff with 
the full amount of the taxes levied, except the taxes due the State 
on assessments made by the State Tax Commission and entere3 
in the State assessment roll. He shall forthwith transmit to the 
Auditor of Public Accounts, in such form and detail as the Auditor 
shall prescribe, a verified statement of the amounts so charged 
showing separately State and local taxes. Any county clerk fail- 
ing to forward such statement to the Auditor of Public Accounts 
for ten days after the roll has been delivered to the sheriff shall 
forfeit to the Commonwealth one thousand dollars, to be recov- 
ered on his bond by action brought by the Attorney General in 
the name of the Auditor of Public Accounts. 

§ 7. Change of sheriffs — When any assessment roll is trans- 
ferred from one sheriff to another, the county clerk shall credit 
the one and charge the other with the amount then outstanding 
on the assessment roll. 



REPORT OF THE SPECIAL TAX COMMISSION. 181 

ARTICLE VI. 
COLLECTION OF TAXES. 

SUBDIVISION I. 
Collection by Sheriff— Bond and Duties. 

§ 1. Sheriff to collect— The sheriff, by virtue of his office, shall 
be collector of all State, county and district taxes, unless the pay- 
ment thereof is, by law, especially directed to be made to some 
other officer. 

§ 2. Sheriff bond and quietus— Qualifications of sureties — 
Lien — The sheriff or collector shall, on or before the first day of 
March next succeeding his election, and on or before the said day 
annually thereafter, enter into bonds with surety for the faithful 
performance of his duties. A quietus by the Auditor of Public 
Accounts, and from the fiscal court of his county for the preceding 
year shall be produced by each sheriff or collector to the county 
court on or before that day, and no tax book shall be delivered to 
the sheriff or collector after the first year of his term who shall 
fail to exhibit such quietus on or before that date. He may exe- 
cute bond at any time after he receives his certificate of election 
up to and including the first day of March succeeding his election, 
and it shall be the duty of the judge of the county court to hold 
a court at any time the sheriff may request for that purpose. The 
county judge shall judge of the sufficiency of the surety, and in 
no case shall sureties be taken who are not jointly worth, subject 
to execution after the payments of all their debts and liabilities, 
a sum equal to the aggregate amount of money, which may prob- 
ably be received by the sheriff or collector during the year suc- 
ceeding the execution of the bond. The Commonwealth, the 
county and taxing district shall have a lien from the date the 
sheriff begins to act upon the real estate of the sheriff therein 
secured or afterward acquired by him, which shall not be dis- 
charged until the whole amount of money collected by the sheriff 
or collector, or for which he may be liable to them respectively, 
shall have been paid, and the same lien shall exist upon the real 
estate of a usurper of the office of sheriff or collector, or a de facto 



182 REPORT OF THE SPECIAL TAX COMMISSION. 

sheriff or collector, or any person who may act as sheriff or col- 
lector. 

§ 3. Failure to execute bond forfeits office — Appointment of 
sheriff or collector — On the failure of the sheriff or collector to 
execute bond and qualify as hereinbefore provided, he shall for- 
feit his office, and the county court may appoint a sheriff or col- 
lector to fill the vacancy until a sheriff or collector is elected, or it 
may appoint a collector for the county of all monies due the State, 
county or taxing district authorized to be collected by the sheriff, 
or it may appoint a separate collector of all the monies due the 
State, county or any taxing district thereof during the vacancy in 
the office of sheriff; and in the event the county court fails for 
thirty days to appoint a collector of money due the State, the 
Auditor of Public Accounts may appoint a collector thereof. Such 
collectors shall, within ten days after their appointment, execute 
bond as required of the sheriff, to be approved by the county 
court, and if the bond be not executed within said time the ap- 
pointment of another collector may in like manner be made and 
qualfied; but such collector shall only be required to give bond 
for and collect such taxes or monies as may be mentioned or pro- 
vided for in the order of the county court appointing him. 

§ 4. Sheriff or collector who forfeits office — Not to be ap- 
pointed to certain offices — No sheriff or collector who shall forfeit 
his office under the preceding section, or who shall resign his of- 
fice, shall be appointed deputy sheriff or collector for the county, 
or elisor or deputy collector or a deputy elisor; and if such ap- 
pointment be made he shall receive no compensation for his 
services as such. 

§ 5. Sheriffs' revenue bond — The bond of the sheriff or collector 
shall be, in substance, as follows: We, A. B. (sheriff or collector, 
as the case may be), and C. I. and E. F., his sureties, bind and 
obligate ourselves, jointly and severally, to the Commonwealth 
of Kentucky, that the said A. B. (sheriff or collector, as the case 
may be), shall faithfully perform his duties. Witness our signa- 
ture this day of The bond shall be exe- 
cuted in duplicate, one of which shall be filed and recorded in the 
county clerk's office, and the other shall be sent to the Auditor 
of Public Accounts and filed in his office. 

§ 6. County court may require additional bond — The county 



REPORT OF THE SPECIAL TAX COMMISSION. 183 

court may require the sheriff to give an additional bond or bonds, 
with good surety, to be approved by the county court whenever 
it may deem the interest of the State or county or demands; and 
the sureties on all the bonds executed by the sheriff shall be 
jointly and severally liable for any default of the sheriff during 
the term in which said bond may be executed, whether the liability 
accrues before or after the execution of such bond or bonds. 

§ 7. Outgoing sheriff to deliver office and settle — Penalty — 
The outgoing sheriff, as soon as his successor has been qualified 
and his Bond approved, shall immediately vacate his office, deliver 
to his successor all books, papers, records and other property held 
by virtue of his office, and shall make a full and complete settle- 
ment of his accounts as sheriff. On the failure of any outgoing 
sheriff for ten days to comply with the provisions of this section, 
he shall be deemed guilty of a misdemeanor and, on conviction, 
be fined in a sum mot less than fifty nor more than five hundred 
dollars, and be liable on his bond for any default. 

§ 8. Death of sheriff — Sureties may nominate collector — If 
the sheriff shall die, resign or be removed during his term of of- 
fice, his sureties shall have the right to nominate a person to col- 
lect the revenues for that year, and upon their written nomination 
of such person he shall be appointed by the county court, and the 
sureties shall remain liable to the Commonwealth for the taxes 
with which their principal was charged: Provided, That this sec* 
tion shall not apply when in any case the sureties, in the opinion 
of the county court, are not in the aggregate worth, in property 
subject to execution, above their debts, the amount of the taxes 
with which their principal- was charged. 

§ 9. Office at courthouse — Books kept by — Balances-— The 
sheriff shall keep his office at the county seat of the county, ex- 
cept in counties where the sheriff has an office established in cities 
or towns other than the county seat, in which counties the sheriff 
shall continue his office at the place now established, and the fiscal 
court shall provide him with a room or rooms for an office with 
a vault or place of safety in which to keep the records of his of- 
fice. He shall keep an accurate account of all moneys received 
by him, showing the amount thereof, the time when, and from 
whom received and on what account; also, of all the disbursements 
made by him, the amount thereof, to whom paid, the time of pay- 



184 REPORT OF THE SPECIAL TAX COMMISSION. 

ment, and on what account; and he shall so arrange and keep his 
books that the amounts received and paid on accounts of separate 
and distinct or specific appropriations shall be exhibited in sep- 
arate and distinct accounts. He shall balance his books on the 
first day of each month, so as to show the correct amount on hand 
belonging to each fund on the day the balance is made. 

§ 10. Sheriff's books open to inspection — The books of the 
sheriff shall at all times be open to the inspection of the Auditor 
of Public Accounts, the Auditor's agent, the fiscal court or any 
member thereof, the Commonwealth's and county attorneys, or 
any taxpayer or person having any interest therein. 

§ 11. Bookkeeping — Form of — Auditor to adopt — It shall be 
the duty of the Auditor of Public Accounts to adopt a form of 
bookkeeping and furnish the books not later than March 1, to be 
paid 'for as other county records, for the several sheriffs and col- 
lectors, and all sheriffs and collectors are required to keep their 
books and accounts in the manner and form required by the Auditor 
of Public Accounts, and on intentional failure of any sheriff or 
collector to keep his books in an intelligible manner and accord- 
ing to the form prescribed by the Auditor of Public Accounts, 
and to make the entries as required by law, he shall be deemed 
guilty of a misdemeanor, and for each offense be fined not less 
than fifty nor more than two hundred dollars, and on failure of 
the Auditor of Public Accounts to furnish the sheriffs and col- 
lectors with such form of bookkeeping and books, he shall be 
deemed guilty of a misdemeanor, and for each offense be fined 
not less than one hundred dollars nor more than five hundred dol- 
lars. The failure to furnish any sheriff or collector such form of 
bookkeeping and books shall be deemed a separate offense. The 
Franklin Circuit Court shall have jurisdiction to try each offense 
against the Auditor of Public Accounts for violations of this sec- 
tion. 

§ 12. Office to be kept open — Taxes, dues, retained out of 
claims — Witness fees — The sheriff shall keep his office open for the 
collection of moneys which he may be entitled to receive, at all 
reasonable times, except on Sunday and legal holidays; and when 
any money is paid him, he shall immediately enter the same upon 
his record books and give to the person paying it a receipt there- 
for, specifying therein the amount and on what account the same 



REPORT OF THE SPECIAL TAX COMMISSION. 185 

was paid, and when paying any money he shall take a similar re- 
ceipt. He shall retain the amount of tax and other public dues 
against any person or corporation out of any claim allowed by 
the Commonwealth or the fiscal court to such person, except claims 
allowed for attendance as a witness, notwithstanding any assign- 
ment of the same. 

§ 13. Deputy sheriffs— Appointment — Bond — The sheriff or 
collector may, with the approval of the county court, appoint one 
or more deputies, and take bond to himself for the faithful dis- 
charge of the duties of such deputies; but in all cases the sheriff 
shall be liable on his bond or bonds for any misconduct or fault 
of such deputies; any deputy may be removed at any time by the 
sheriff. 

§ 14. Justices' districts visited to receive taxes — Notice — The 
sheriff or one of his deputies shall, at least once every ninety days, 
between March first and November first, visit each justice's dis- 
trict of the county for the purpose of receiving taxes; and he shall 
give notice of the time and place where he will receive taxes in 
such districts by written or printed notices posted at three or 
more public places therein, for not less than ten days before the 
day designated for that purpose. 

§ 15. Taxes when due- — Reports and payments to Auditor — 
Penalty— The sheriff or collector of the State revenue in each 
county of this Commonwealth shall, on the first day of May, June, 
August, September, October, November, December, under oath, 
report to the Auditor of Public Accounts the amount of all taxes 
he has collected and pay the same immediately, and shall account 
for and pay all taxes which he has collected for the State into the 
State Treasury by the first day of December in each year; and 
upon his failing to do so he and his sureties shall be liable there- 
for, and shall be proceeded against at the first term thereafter ot 
the Franklin Circuit Court. Any sheriff or collector who shall fail 
to report as herein required shall be liable to indictment in the 
Franklin Circuit Court, and fined not less than one hundred dol- 
lars nor more than five hundred dollars for each offense, and it 
shall be the duty of the Auditor of Public Accounts to report ro 
the grand jury of Franklin county at the next term of said court 
after such failure to report, the name of such sheriff or collector 
so failing to report. The sheriff or collector shall be required by 



186 REPORT OF THE SPECIAL TAX COMMISSION. 

the Auditor of Public Accounts to pay a penalty of six per centum 
on all taxes collected and unpaid by him on the 31st day of De- 
cember in each year. The Auditor of Public Accounts, in his set- 
tlement with the sheriff or collector, shall charge him with the 
penalties accruing under the provisions of this act. 

§ 16. Sheriff not to be interested in public works nor buy 
claims — Penalty — No sheriff or collector shall be concerned or in- 
terested, directly or indirectly, in the construction of any public 
works or improvements made or undertaken, in which the county 
or State shall be directly or indirectly inteiested, or on which he 
may be required to pay money, nor speculate in any claim against 
the State or county. Any sheriff or collector violating the pro- 
visions of this section shall be guilty of a misdemeanor, and, on 
conviction, shall be fined a sum not less than five hundred dollars 
and not more than two thousand dollars for each offense. 

§ 17. Misapplication of funds collected — Penalty — It shall be 
unlawful for any sheriff or collector to apply or use any money 
received by him for any purpose than that for which such money 
shall have been paid or collected; every such application shall be 
deemed a misdemeanor, and, on conviction, the sheriff or collector 
shall be fined not less than one hundred nor more than five hundred 
dollars for each offense. 

§ 18. Sheriffs' settlements — Exceptions to — Appeal from judg- 
ment on — Each sheriff or collector shall, when required by the 
fiscal court, settle his accounts of county or district taxes, and at 
the regular October term of each year the fiscal court shall ap- 
point some competent person other than the Commonwealth's or 
county attorneys to settle the accounts of the sheriff or collector 
of money due the county or district. The report of such settlement 
shall be filed in the county clerk's office, and be subject to excep- 
tions by the sheriff or collector or county attorney, who shall rep- 
resent the Commonwealth and county, and the county court shall 
try and determine such exceptions. An appeal may be prosecuted 
by either party from the judgment of the county court on such 
settlement, in the same manner as provided by law for appeals 
from judgments of the quarterly court, except that the county at- 
torney shall not be required to give an appeal bond, or actions may 
be instituted in any court of competent jurisdiction to correct the 



REPORT OP THE SPECIAL TAX COMMISSION. 187 

settlement; and the settlement, when approved, shall be recorded 
in the county clerk's office. 

§ 19. Reports to county of taxes collected — The sheriff or col- 
lector of the State and county revenue of each county of this Com- 
monwealth shall, on the first day of May, June, July, August, Sep- 
tember, October, November and December in each year, report under 
oath to the county court of his county the amount of State and 
county taxes he has collected, together with all fines, forfeitures 
or money, or any other account that shall have been received or 
collected by him showing in said report the amount collected for 
and belonging to each particular fund, for which such revenue or 
money may be intended, and the disposition of such revenue ot 
money collected by him. Said report shall be filed and recorded 
in a separate book furnished by the county clerk for that purpose, 
which shall be open for inspection in the office of the county clerk. 
Any sheriff or collector who shall fail to report as herein required 
shall be liable to indictment in the county of his residence, and 
fined not less than one hundred dollars nor more than five hundred 
dollars for each offense. 

§ 20. Taxes when due—Interest and penalty — All State, 
county and district taxes, except as otherwise specially provided, 
shall be due and payable on and after the first day of June after 
the assessment, and all taxpayers whose taxes are not paid on the 
first day of December after the same are due shall be deemed de- 
linquent, and such taxes shall bear interest at the rate of six per 
cent, per annum from the first day of December after they are due 
until paid; and any person or persons failing to pay their taxes 
by the first day of December in the year following the assessment 
for such taxes, shall pay a penalty of six per centum additional 
on the taxes due and unpaid. The sheriff or collector whose duty 
it is to receive or collect the taxes shall collect the interest and 
penalty and account for the same in. the same way in which they 
are required to collect and account for the taxes. 

§ 21. Sheriff to record payments in assessment roll — The 
sheriff must mark the date of payment of any tax in the assess- 
ment book opposite the name of the person paying. 

§ 22. Tax receipt — The sheriff must give a receipt to the per- 
son paying any tax, specifying the property against which the tax 
was assessed, the amount of the assessment and the amount paid. 



188 REPORT OF THE SPECIAL TAX COMMISSION. 

§ 23. Form of tax receipt — The Auditor of Public Accounts 
shall prescribe the form of the receipts to be given to taxpayers 
by the sheriff and they shall be uniform each year throughout the 
State, and distinguished from year to year by difference in coioj- 
or design, and shall plainly show the year for which the taxes have 
been paid and the county in which paid. Provided, that the tax 
receipts to be used by the sheriff for the payment of local taxes 
only on property assessed by the State Tax Commission, the State 
tax on which is to be paid directly to the State, shall be different 
in form and color from those for the taxes on other property on 
which both State and local taxes are collected. 

All tax receipts and the stubs thereof shall be numbered con- 
secutively, and charged to the sheriff by said numbers and he shall 
return to the Auditor of Public Accounts and be credited there- 
with, all tax receipts not issued at the time that he makes his final 
settlement with the Auditor. He shall, however, retain the stubs 
thereto as part of his office records. 

§ 24. Payment of taxes on single parcels of real estate — The 
taxes on any particular lot, piece or parcel of land contained in 
any assessment may be paid separately from the whole assess- 
ment, if such lot, piece or parcel has a separate valuation in the 
assessment roll. The sheriff shall make an entry on the margin 
of the assessment book, showing what certain property has been 
released by the payment of the taxes as herein provided, together 
with the amount of such taxes specifically set forth. 

Joint owner paying tax has lien — When land owned by two or 
more persons shall be assessed conjointly, and any one or more 
of them shall not pay their portion of the tax, any such owner 
paying the whole tax, or who shall redeem the whole tract after 
it has been sold for delinquent taxes, shall have a lien on the de- 
linquent's portion for the tax justly owing by such delinquent, 
and may sue for and recover the same. 

Court authorized to apportion assessment — When two or more 
persons own land which has been assessed as one tract, any one, 
or more of them, after partition of the same, and upon ten days' 
notice to the other owners, may make application to the county 
court of said county for an apportionment of the assessment; and 
the said court is hereby authorized to apportion the assessment 
among the owners according to the value of their respective in- 



REPORT OP THE SPECIAL TAX COMMISSION. 189 

terests, as shown by the proof introduced by them. If the de- 
linquent taxes are due on said land, any one or more of said owners 
may have his portion released therefrom by paying to the officers 
to whom such delinquent taxes are payable his pro rata share 
thereof, as ascertained by the judgment of apportionment, and 
said judgment shall be final, unless an appeal therefrom to the cir- 
cuit court, which is hereby given jurisdiction, be prosecuted within 
sixty days from the rendition of the same. 

§ 25. Assessment roll sole warrant for collection of taxes — The 
assessment roll shall constitute the sole warrant for collecting 
taxes and shall be a sufficient warrant for enforced collection. 
Any sheriff or other person receiving any money tendered in pay- 
ment of taxes, except as hereinafter in this act provided, when 
such taxes are not charged on the assessment roll, shall be guilty 
of a felony, and on conviction thereof shall be confined in the peni- 
tentiary for one year. The money so collected shall be recovered 
under his bond. Provided, however, that whenever, in the per- 
formance of his duties, the sheriff shall discover any property 
subject to taxation that has been omitted from the assessment roll, 
it shall be his duty to immediately report the property with a 
description thereof to the county clerk. The county clerk shall 
at once apply to the county court for an order to assess the prop- 
erty, and on the issuance of the order shall immediately enter the 
property in the roll with a valuation and assessment against it, 
to be approved by the court, as nearly as may be in conformity to 
the value and assessment of other similar property, and shall ex- 
tend the taxes against it. The sheriff shall then collect the taxes. 
If the person whose property has been assessed in this manner shall 
be dissatisfied with the valuation placed thereon by the clerk and 
by the county court, he shall pay the taxes to the sheriff under 
protest, and having done so may appeal to the State Tax Com- 
mission, and the Commission shall fix the value. Pending de- 
cision of the appeal, the sheriff shall hold the taxes paid under 
protest and shall adjust the amount to conform to the decision. 
If the omitted property be property which the owner failed to list 
in the statement which taxpayers are required to file with the 
district tax commissioner the making of an appeal either to the 
county court or to the State Tax Commission shall not work any 
postponement of the application of delinquency penalties. But 



190 REPORT OF THE SPECIAL TAX COMMISSION. 

in all other cases no penalties for delinquency shall apply until 
ten days after the appeal shall have been decided. 

§ 26. Sheriff's commissions — The sheriffs or tax collectors 
shall be allowed by the Auditor of Public Accounts the following 
commissio'iis upon the sinus collected or accounted for or paid 
into the State Treasury in each year: Upon the first five thousand 
($5,000) dollars, ten per cent um, and upon the residue four per 
centum. There is hereby appropriated for each year out of any 
money in the Stale Treasury not Otherwise appropriated, the sums 
necessary to pay the above commissions, on the Commonwealth's 
share of the taxes, lie shall be allowed by the treasurer of the 
county ten per cent inn upon the first live thousand ($5,000) dol- 
lars of the county revenue collected and four per centum upon 
the residue. Provided, That, in no case shall the aggregate an- 
nual compensation o«f the sheriff for all official services exceed five 
thousand ($5,000) dollars, independent of the compensation of 
legally authorized deputies and assistants. Provided, further, that 
in case any city arranges for the collection of city taxes by the 
sheriff on the basis of the county assessment rolls, the compensa- 
tion therefor shall not exceed two per centum of the taxes so col- 
lected. 

Before the county treasurer, any city treasurer or auditor shah 
allow the commissions provided for in this section, he shall certify 
to the Auditor of Public Accounts the amounts to be allowed, at 
the rates provided for in this section, and the Auditor of Public 
Accounts shall certify back to the county or city treasurers the 
amounts which shall be paid. In case the fees or commissions al- 
lowed under this section, at the rates herein provided for, exceed 
five thousand dollars ($5,000), the amount to be allowed by the 
counties, the amount to be allowed by the cities, and the amount 
to be allowed by the Common wealth, in the aggregate of five 
thousand dollars ($5,000) shall be divided in proportion as the 
commissions on the county taxes, State taxes and the city taxes 
bear to the total commissions so computed. 

It shall be the duty of the Auditor of Public Accounts to ascer- 
tain and determine that the aggregate commission shall not ex- 
ceed five thousand dollars ($5,000). 

§ 27. Tax to operate as judgment — Kvcry tax has the effect of 
a judgment against the person, and every lien created by this act 



RUPORT OK THK SPECIAL TAX COMMISSION. 191 

has the force and effect of an execution duly levied against all the 
property of the delinquent; the judgment is not satisfied nor the 
lien removed until the taxes are paid or the property sold for the 
payment thereof. 

§ 28. Tax on personal property a lien on real estate — Every 
tax due upon personal property is a lien upon the real property 
of the owner thereof from and after the first day of September in 
each year. Every tax due upon real property is a lien against the 
property assessed; and every tax due upon improvements on land 
assessed to some person other than the owner to the land is a lien 
upon both the land and the improvements, which liens attach as 
of the first day of September in each year. 

Whenever the owner of land shall, in order to protect his title, 
pay the taxes upon any improvements situated thereon but as- 
sessed to some other person than the owner of the land, he shall 
have a lien upon said improvements equal to the amount of the 
taxes paid. 

§ 29. Tax collected from persons removing or concealing prop- 
erty — It shall be the duty of the sheriff or collector who at any 
time has reasonable grounds to believe and does believe that any 
person -from whom a tax is due is about to remove his property 
from the State, county or taxing district or to conceal the same, to 
immediately collect said taxes as hereinafter provided for the col- 
lection of taxes, costs and penalties of delinquent taxpayers. 

§ 30. Secured taxes not to be collected by summary process — 
Taxes which, in the opinion of the sheriff, are a lien on real estate 
of an amount sufficient to secure the full payment thereof with 
penalties and costs if the tax should become delinquent shall not 
be collected by distraint and sale nor by attachment as provided 
for in subdivision three of this article. But all other taxes shall, 
if payment be refused under section twenty-nine immediately 
above, or if they become delinquent, be collected by distraint and 
sale or by attachment. As soon as any taxpayer becomes delin- 
quent, the sheriff or the collector of the county where the property 
is liable shall distrain sufficient personal property of such delin- 
quent, if found in the county, to satisfy all taxes, interest and penal- 
ties due. If a sufficient amount of personal property be not found, 
then he will levy on a sufficient quantity of the delinquent's land 
for that purpose. But if no land be found belonging to the delin- 



192 REPORT OF THE SPECIAL TAX COMMISSION. 

quent, the sheriff shall levy on any real estate owned by the de- 
linquent at the time of assessment for the taxes or a sufficient 
amount to satisfy the taxes, cost, and penalties due. If the sheriff 
makes illegal or unreasonable seizure and levy for taxes, he shall 
be liable in damages to the party aggrieved. A sheriff or tax 
collector shall sell for cash any property belonging to the delin- 
quent taxpayer so levied upon or as much thereof as will pay the 
taxes due, penalties, interest and cost and his commission, in the 
same manner that property is sold under execution, except that 
the land shall not be valued, and shall be advertised by posting, 
for fifteen days before the sale, a written or printed notice at the 
courthouse door, and by publication once a week for four consecu- 
tive weeks prior to the day of sale in a newspaper of general cir- 
culation, if there be one in the county; if mot, then by printed 
hand bills posted for fifteen days before the sale at the courthouse 
door and in three or more conspicuous places in the taxing district; 
and he shall, not less than fifteen days before the sale, mail to the 
delinquent a postal card addressed to his place of residence or place 
of business, if such can be ascertained, notifying him of the time 
and place of sale; and in order to cover the cost of such advertise- 
ment and notification, the sheriff or collector shall have one dol- 
lar for each person whose property is advertised, to be paid by the 
delinquent, but in no event to be paid by the State, county or tax- 
ing district. 

SUBDIVISION II. 

Collection of Taxes by Attachment. 

§ 1. Collection of taxes — Sheriff to give notice — If the sheriff, 
his deputy or other persons having revenue, county levy or other 
taxes of any character, or other public dues, not secured by real 
estate, in his hands for collection, believes another person to be 
indebted in money or property to the person owing taxes or pub- 
lic dues, and believes he cannot otherwise collect the tax, he shall 
deliver, or cause to be delivered, to the person owing the taxes or 
public dues, and to the person owing him, anywhere he may be 
found, written notice in substance as follows: "Mr. A. B., tha 

taxes due by C. D amount to the sum of $ , 

cents. To that extent you are notified not to pay or deliver to him 
any money or property which you now owe, or may hereafter be 



REPORT OP THE SPECIAL TAX COMMISSION. 193 

indebted to him, and to appear before the county court of 

county, on the first day of its term, to show 

cause why you should not be adjudged to pay said taxes. This 
day of , nineteen 

1 Sheriff. 

§ 2. Effect of notice — Trial judgment — Sale of property — This 
notice shall be signed by the sheriff, his deputy or by the collector, 
and shall operate to enjoin the person named in it from paying the 
amount mentioned in the notice, money, property, notes, accounts 
and other things of value, owing at the time of the service of the 
notice, or accruing thereafter, until the matter is heard by the 
county court. On the hearing by the county court, the debtor of 
the delinquent shall be compelled to disclose, in open court, all 
matters of account and indebtedness, whether of money, property 
or labor, owing at the date of the notice, or incurred thereafter. 
The court shall direct the said debtor to pay or deliver to the 
sheriff or collector any money, property or other thing then, or 
at the time notice was served, due said delinquent, or to the ex- 
tent of such taxes and costs, or to the extent of his liability, in- 
cluding such as accrued after notice, though paid or discharged; 
and, if it be property, the sheriff shall sell the same, after adver- 
tising by handbill posted at the courthouse door for ten days. If 
the person so indebted to the person owing taxes fail to attend, or 
fail to make disclosure, the court shall render judgment against 
them for all the taxes. 

§ 3. Delinquent not released until tax paid — The person owing 
taxes shall not be discharged from liability for them until they are 
fully paid, or the amount realized under the proceedings afore- 
said. 

§ 4. Notice may include all persons indebted — All persons in- 
debted to the person owing taxes may be included in the same 
notice, though residing out of the county of the sheriff or collector. 

§ 5. Docket — How made out — Parties — The proceeding shall 
be docketed in the mame of the Commonwealth and, if necessary, 
to the interest of the Commonwealth, the court may cause other 
parties to be brought in before it, and be made party to the pro- 
ceedings. 

§ 6. Judgment — Defenses — The court may hear evidence, and, 
in its judgment, shall provide for the payment of the State rev- 



194 REPORT OF THE SPECIAL TAX COMMISSION. 

enue, the county levy due, and, if there be other taxes due the 
court shall direct the payment thereof: Provided, That the de- 
linquent shall have the right to defend by showing, first, that the 
property has never been assessed, but it shall not be sufficient to 
show a defective assessment merely; second, that the property is 
not subject to taxation; third, that the taxes have been paid. 

SUBDIVISION III. 

Collection of Taxes Assessed on the State Assessment Roll. 

§ 1. Certain taxes to be paid to State Treasurer — All taxes as- 
sessed on the State assessment roll shall be paid directly to the 
State Treasurer. 

§ 2. Notice to State taxpayers — The Auditor of Public Ac- 
counts shall each year during the month of January next following 
the assessment send to each company or person, whose property is 
assessed on the State assessment roll, an order setting forth the amount 
of the assessment and the amount of the taxes due and payable and 
directing the taxpayer to pay the amount to the State Treasurer. 

§ 3. State Treasurer to receipt for taxes — The State Treasurer 
upon receipt of any taxes shall send the taxpayer a receipt there- 
for, and shall send the Auditor of Public Accounts each day a 
statement showing the amounts paid and by whom, and the 
Auditor shall mark them paid on the State assessment roll with 
the date of payment. 

§4. State taxes due when — All of such taxes shall be due and 
payable on February first next following the assessment and shall be 
delinquent June first next thereafter, and on that date the same pen- 
alties shall attach as are provided for other taxes. 

§ 5. Injunction not to issue against State — No injunction shall 
ever issue in any suit, action or proceeding in any court against 
the Commonwealth or against any officer thereof to prevent or 
enjoin the collection of any taxes levied under the provisions of 
this act relating to property assessed on the State assessment roll; 
but after payment of the taxes, action may be maintained to re- 
cover any tax illegally collected in the manner provided in the next 
section hereto. 

§ 6. Companies may sue to recover — How, when — Any com- 
pany or person claiming to be injured or aggrieved by the assess- 
ment of property made by the State Tax Commission may, after 



REPORT OF THE SPECIAL TAX COMMISSION. 195 

having duly presented its or his objections before the Commis- 
sion as provided for in section five of subdivision three of article 
three of this act, but not if he has failed or neglected so to do, 
bring action against the State Treasurer for the recovery of any 
taxes, penalties or costs paid on such assessment. But no such action 
shall be brought later than six months after the day on which the 
taxes were due, nor unless such company or person shall have 
paid the taxes and shall have, on paying the taxes, filed with the 
Auditor of Public Accounts a written protest, stating whether the 
whole assessment is claimed to be void, or if a part only, what 
part, and the grounds upon which such claim is founded; and 
when so paid under protest, the payment shall in no case be re- 
garded as voluntary. Whenever under the provisions of this sec- 
tion an action is commenced against the State Treasurer, it shall 
be instituted in the Franklin Circuit Court. The Attorney Gen- 
eral shall defend the action. The provisions of the code as to- 
pleadings, proofs, trials and appeals are applicable to the proceed- 
ings herein provided for. A failure to begin such action within 
the time herein specified shall be a bar against the recovery of such 
taxes. 

ARTICLE VII. 

COLLECTION OF DELINQUENT TAXES. 

SUBDIVISION I. 

Delinquent Taxes — General Procedure. 

§ 1. Publication of delinquent tax list — Within fifteen days 
after the day on which the unpaid taxes become delinquent the 
sheriff shall publish the delinquent list. The delinquent list shall 
contain the names of the delinquent taxpayers in alphabetical 
order, a description of the delinquent property and the amount 
of all the taxes, penalties and costs due opposite each name and 
description of property. For defraying the cost of publication and 
of preparing the list, there shall be a charge for costs against each 
delinquent taxpayer of fifty. cents on each assessment and another 
fifty cents on each one hundred dollars, or fraction thereof, of de- 



196 REPORT OF THE SPECIAL TAX COMMISSION. 

linquent taxes. When collected these charges for costs shall be 
paid into the county treasury and from that treasury, by order of 
the county court, there shall be paid the sheriff's expenses in pre- 
paring the delinquent list and publishing it. 

§ 2. Notice of sale — The sheriff shall append to the delinquent 
list a notice stating that if the taxes, penalties and costs thereon 
indicated are not paid within twenty-one days after the date of 
publication, the property upon which the taxes are a lien will be 
sold for taxes. 

§ 3. Publication where — The publication must be made once 
a week for three successive weeks in some newspaper, or supple- 
ment thereto, published in the county, or if no newspaper be pub- 
lished in the county, then either in some newspaper of general 
circulation in the county and by posting either the printed or the 
written list at the county courthouse door. The publication shall 
be with the lowest bidder after ten days' notice of intention to 
publish, and bids must be by sealed proposals. 

§ 4. Time and place of sale — The publication must designate 
the day and hour when the property will by operation of law be 
sold for taxes, which must not be less than twenty-one nor more 
than twenty-eight days after the date of publication. The place 
of sale shall be the sheriff's office. The sale shall date as of Janu- 
ary first in each year, even though actually held at a later date, 
but no additional penalties, interest or costs shall be required to 
be paid if the delinquent taxes, the first penalties, and the first 
costs are paid before the actual sale. 

§ 5. Copy of delinquent list sent to Auditor and Commission 

— The sheriff shall file a copy of the publication with the county 
clerk, send a second copy to the Auditor of Public Accounts, and 
a third copy to the State Tax Commission, with an affidavit at- 
tached to each stating that it is a true copy, that the publication 
was made as required by law, and how the publication was made. 
This affidavit shall be primary evidence of all the facts stated 
therein. The county clerk shall enter in the assessment roll the 
penalties and costs against each piece of delinquent property, and 
shall charge the sheriff with the same. 

§ 6. Procedure of the sale — On the day and hour fixed for the 
sale all property upon which the taxes are delinquent, or upon 
which any part of the taxes, penalties and costs have not been 



REPORT OF THE SPECIAL TAX COMMISSION. 197 

paid shall, by operation of law and by declaration of the sheriff, 
be sold to the Commonwealth. The sheriff shall make an entry 
"sold to the Commonwealth" on the assessment roll opposite each 
original entry of the property, the taxes upon which are delinquent, 
and shall enter the date of sale He shall be credited by the 
county clerk, in his settlement, with the amount of the taxes, 
penalties and costs cr. the property so sold. 

Redemption before sale— At any time before the hour of the 
sale any person may pay the taxes, penalties and costs due, and 
the tax lien shall be thereby relieved. But the payment of the 
taxes by any person other than the owner or the person rightfully 
in control of the property, or other than one having a legal claim 
or interest therein, shall not create any new lien on the property. 
But any mortgagee, or other person having a legal claim to or 
interest in the property may pay the taxes to protect his rights. 
and having done so, may add the amount thereof to his claim. 
Furthermore, whenever the original taxes amount to the sum of 
three hundred dollars or more, the sale of the property to the 
Commonwealth shall not prevent the bringing of suit to recover 
the taxes and penalties as elsewhere in this act provided. 

§ 7. Notice to Auditor and Commission — Immediately on 
completion of the sale, the sheriff shall transmit to the Auditor of 
Public Accounts and to the State Tax Commission a complete 
statement with description of all property sold to the Common- 
wealth for non-payment of taxes. The statement shall be in such 
form as the Auditor of Public Accounts shall prescribe, and shall 
contain a description of the property sufficient to identify it for 
purpose of conveyance. It shall also state the amount of taxes, 
penalties, and costs for which the property was sold. 

§ 8. Investigation of cause of delinquency and state of prop- 
erty — Immediately upon receipt of the list of property sold to the 
Commonwealth for delinquent taxes, the State Tax Commission 
shall direct the district tax commissioner of any county in which 
any such property is located to investigate and report on the cause 
of the delinquency, and to search out, if possible, some person hav- 
ing a legal interest in the property and notify such person of the 
fact of the sale and of his rights of redemption, and shall take 
such other steps as in its opinion are likely to bring about the 
payment of the taxes to the end that the public revenue shall not 



198 REPORT OF THE SPECIAL TAX COMMISSION. 

be impaired. If the property be found to be vacant and unused, 
the original owner unknown, absent, or unable to pay, the Com- 
mission may authorize the county court to lease the property to 
any responsible tenant, who shall pay as rental an amount not 
less than the annual taxes thereafter levied and assessed. 

§ 9. Five years for redemption — All property sold to the Com- 
monwealth for non-payment of taxes shall be subject to redemp- 
tion at any time within five years after the day of sale, which for 
the purpose of convenience and uniformity in reckoning the period 
of five years and of computing the interest and additional penal- 
ties shall be taken to be January first in each year. Redemption 
may be made by payment into the county treasury, for the use 
and benefit of the Commonwealth, the county and other taxing dis- 
tricts where taxes were not paid, of all sums due, including the 
additional penalties and charges hereinafter provided. 

Additional penalties — In addition to the original taxes, penal- 
ties, and costs, the person redeeming the property must pay the 
following charges and penalties: (1) interest at the rate of six 
per cent, compounding annually on the entire amount of taxes, 
penalties, and costs for non-payment of which the property was 
sold; (2) penalties at the rate of ten per cent, for each year or 
fraction thereof elapsing before redemption, reckoned upon the 
original amount of taxes, penalties and costs, for non-payment of 
which the property was sold. 

Division of money recovered — The money received from re- 
demption of delinquent property shall be divided by paying to 
the Commonwealth its share of the taxes and that proportion of 
the penalties and interest which its taxes bear to the whole, and 
by paying to the county and each other taxing district in like man- 
rer its taxes and its proportion of the interest and penalties. The 
costs shall remain in the county treasury. The county clerk shall 
on presentation of the tax receipt or on written notice by the 
sheriff, enter in the assessment roll the fact of redemption, the 
amount paid, and the date of redemption. 

§ 10. Property to be assessed each year — So long as the right 
of redemption runs, the property sold to the Commonwealth for 
non-payment of taxes shall be assessed each year in the name of 
the last owner of record in the same manner as other property is 
assessed. But under the name of the person to whom the prop- 



REPORT OF THE SPECIAL TAX COMMISSION. 199 

erty is assessed shall be entered the words "sold to the Common- 
wealth January first ," with the year of sale, or if sold 

more than once, the years of such sales. The sheriff shall, when 
accepting the taxes in any subsequent year on property sold for 
taxes, call the attention of the person so paying to the existing 
delinquent taxes, penalties and costs unpaid. Should any property 
not redeemed again become delinquent during the five years after 
sale, it shall be again sold to the Commonwealth in the same man- 
ner as in the first year, and the taxes, penalties and costs for each 
subsequent delinquency shall run against the property, as well as 
the original ones. 

§ 11. Deed to the Commonwealth — If any property sold to 
the Commonwealth be not redeemed within five years from the date 
of sale to the Commonwealth, the sheriff or his successor in of- 
fice, must make to the Commonwealth a deed to the property. 

This deed shall be in substance and may be in form as follows : 

This INDENTURE, made the day of 

in the year of our Lord nineteen hundred and , 

between , sheriff of the county of 

f in the State of Kentucky, party of the first 

part, and the Commonwealth of Kentucky, party of the second 
part. Witnesseth: 

THAT WHEREAS, the real property hereinafter described 
was duly assessed for taxation, or became subject to a lien for 
taxes duly levied and assessed, in the year nineteen hundred and 

} and was assessed in the name of 

(stating the name on the assessment roll), and 

was thereafter on the day of 

in the year ninteen hundred and , duly sold to 

the Commonwealth of Kentucky by , 

sheriff of the county of , for non- 
payment of delinquent taxes which had been legally levied in 

the year nineteen hundred and and were a lien 

on the real property, the total amount for which the same was 
sold being dollars cents. 

AND WHEREAS, a period of five years has elapsed since 
said sale and no person has redeemed the property. 

NOW, THEREFORE, the party of the first part in con- 
sideration of the premises, and in pursuance of the statute in 



200 REPORT OF THE SPECIAL TAX COMMISSION. 

such case made and provided, does hereby grant, convey and 
transfer to the party of the second part that certain real prop- 
erty in the county of . , State of Ken- 
tucky, more particularly described as follows, to-wit : 



IN WITNESS WHEREOF said party of the first part has 
hereunto set his hand and name of his office on the day and 
year first above written. 



Sheriff of the county of 



No charge shall be made by the sheriff for making any such 
deed and the acknowledgments of such deeds shall be taken by 
the county clerk free of charge. 

All such deeds shall be recorded in the office of the county 
clerk of the county where the property is situated and the clerk 
shall make no charge for recording the same. 

The Auditor of Public Accounts shall furnish the blank forms 
for the deeds. 

The deed being duly recorded shall be at once forwarded to 
the Auditor of Public Accounts by the clerk and the Auditor shall 
acknowledge the receipt of same. 

A deed to the Commonwealth having once been issued, no fur- 
ther deed need be made for any subsequent delinquency incurred 
during the five-year period.- 

Such deed shall convey to the Commonwealth the fee simple 
to the real estate, and no mortgage or other interest in or claim 
to the property shall be valid as against the Commonwealth. 

The right of redemption shall cease and determine with the 
issuance of the above deed. Property deeded to the Common- 
wealth shall not be assessed while the title still rests in the Com- 
monwealth. 

§ 12. No injunction to issue against collection of tax — Suit 
when — No action or proceeding shall be commenced or instituted 



REPORT OF THE SPECIAL TAX COMMISSION. 201 

in any court in this State to enjoin the sale of property for taxes, 
or to enjoin the collection of any taxes, or for the recovery of any 
property sold for taxes, or for the recovery of any taxes when 
paid, unless the plaintiff therein shall have himself complied with 
the law, and shall have first exhausted all his remedies by com- 
plaining to the board of supervisors, and appealing to the State 
Tax Commission and otherwise as in this act provided, nor un- 
less he shall have paid the taxes in full and at the time of pay- 
ment shall have filed with the sheriff or tax collector a written 
protest stating the grounds of complaint. Such suit must be 
brought within sixty days after payment of the taxes. 

§ 13. Commission to have custody— The State Tax Commis- 
sion shall have custody of and shall administer and superintend all 
property acquired by the Commonwealth for non-payment of taxes. 
The Auditor of Public Accounts shall, whenever a deed has been 
received conveying property to the Commonweakh for non-pay- 
ment of taxes, at once send the State Tax Commission a copy 
thereof. The Commission shall, on receipt of the copy of the deed, 
make diligent inquiry through the district tax commissioner as 
to the condition of the property, its probable value, the reasons for 
the delinquency having been incurred and continued, if such can 
be determined, the state of the improvements thereon, and par- 
ticularly whether there are any trespassers living on or using the 
property, and all other facts necessary to determine how the prop- 
erty can best be protected and conserved and when and how it 
may best be sold to the advantage of the Commonwealth and the 
recovery of the unpaid taxes. It may, if it deems it wise, lease 
the property pending the sales hereinafter provided for. The 
rentals shall be paid to the State Treasurer on order of the Auditor 
of Public Accounts and shall be for the use and benefit of the 
Commonwealth. The Commission shall take steps to evict any 
trespassers and to have them punished, by forcible entry and de- 
tainer proceedings as provided in the civil code of practice. 

§ 14. Sale of property deeded to the Commonwealth — The State 
Tax Commission shall fix a price at which the property may be 
sold to the first comer at any time within six months after the 
issue of the deed to the Commonwealth, but such price shall not 
be less than the assessed value of the property. It shall publish 
the offer to sell and the price in the same manner as the delinquent 



202 REPORT OF THE SPECIAL TAX COMMISSION. 

list is published. Offers to purchase shall be made to the county 
court. The first comer willing and able to pay the price fixed by 
the Commission shall be entitled to a deed: (1) on payment into 
the county treasury of the price so fixed for the use and benefit 
of the Commonwealth; or (2) on payment in cash of an amount 
equal to all taxes, penalties and costs due and the filing of a bond 
with the county court with sureties to cover the balance due and 
binding the would-be purchaser and his sureties to pay the bal- 
ance within six months of the filing of the bond. 

§ 15. Sale by auction — If no purchaser shall appear within six 
months from the date of issuance of the deed to the Common- 
wealth who is willing and able to pay the price fixed by the State 
Tax Commission as evidence in the manner provided in section 
fourteen immediately above, the Commission shall within ten days 
fix a day and place at which the property shall be sold at public 
auction to the highest bidder. It shall also fix a minimum, or 
upset price, which shall be the minimum bid to be considered, and 
which shall not be less than the total amount of taxes, penalties 
and costs accumulated and due, including all taxes assessed and 
unpaid during the five years allowed for redemptions If no bid 
be made at the auction, from a responsible bidder able to pay the 
amount bid, equal to or in excess of the minimum or upset price, 
the Commission shall order a new sale at public auction within 
the next six months, and at that time the property shall be sold 
to the highest bidder. The sheriff shall conduct all such auctions 
and shall be allowed a fee of one and one-half dollars for each 
piece of property offered for sale, and a commission of five per 
cent, on the excess received over the amount of taxes, penalties, 
and costs. Deeds shall be issued and signed by the Auditor of 
Public Accounts. 

§ 16. Division of the proceeds — Out of any money received 
from the sale of any property deeded to the Commonwealth for 
non-payment of taxes there shall first be paid to the county all 
costs of sale and of advertising the delinquency, then to the State, 
to the count) 7- , or to any other taxing district, their respective taxes, 
together with a proportion of the penalties equal to the proportion 
of the share of each in the total taxes; then the excess, if any, 
shall be paid to the Commonwealth. If the amount received be 
not sufficient to pay alj t<* xes ? penalties and costs, there shall first 



REPORT OP THE SPECIAL TAX COMMISSION. 203 

be paid the costs, and the remainder shall be divided, as nearly as 
may be, in proportion to each division of government's share in 
the taxes. The Auditor of Public Accounts shall make the ap- 
portionment provided for in this section. 

§ 17. Fiscal court may move to recover taxes — The county at- 
torney of any county, in which any property may in the first in- 
stance go delinquent and be sold to the Commonwealth for non- 
payment of taxes, may of his own initiative search out the owner, 
mortgagee or other person having a legal interest in the property, 
and endeavor to bring about the redemption of the property. He 
may also, after the deed to the Commonwealth has been made, by 
advertisement or otherwise, call attention to the proposed sale 
under the authority of the State Tax Commission and endeavor to 
find a purchaser, all to the end that the State, county and other 
revenues shall be unimpaired. He shall receive as compensation 
for his services, twenty per cent, of any moneys recovered directly 
by his efforts. 

§ 18. Taxes over $300 to be recovered by action — Each year 
after the delinquent tax list has been prepared and before the date 
set for selling the property to the Commonwealth, the district tax 
commissioner, the sheriff, and the county attorney shall examine 
the list and make a note of all cases in which the taxes against 
any one delinquent taxpayer, whether on a single assessment or 
on several, amount in the aggregate to three hundred dollars or 
more. The same officers shall then confer as to the probability 
of the successful collection of any of these taxes by action if they 
be not paid before the date of sale to the Commonwealth. If two 
or more of them agree that any such delinquent taxpayer has prop- 
erty anywhere within the jurisdiction of the Commonwealth of any 
kind sufficient in their opinion to cover the taxes, penalties and 
costs, they shall direct the sheriff to notify the Auditor of Public 
Accounts that in the opinion of the three conferees an action to 
recover these taxes would probably prove successful and shall send 
him a certified copy of the entries in the assessment roll and in 
the delinquent list and of all other records and actions relative to 
these assessments and taxes. The Auditor of Public Accounts 
shall thereupon direct the county attorney to bring suit against the 
delinquent to enforce collection of all State, county or other taxing 
district taxes. The provisions of the code relating to pleadings, 



204 REPORT OF THE SPECIAL TAX COMMISSION. 

proofs, trials and appeals are hereby made applicable to the pro- 
ceedings herein provided for. The moneys collected by action 
shall be divided and distributed in the manner provided in section 
sixteen of this subdivision. 

The Auditor of Public Accounts shall, however, with the advice 
and consent of the State Tax Commission, have power to reverse 
the action of the three conferees and to direct that no suit be 
brought. In that event, the collection of the taxes shall take the 
usual course. 

SUBDIVISION II. 
Collection of Delinquent Taxes on the State Assessment Roll. 

§ 1. Taxes when delinquent— At the close of business on 
June first in each year all taxes appearing unpaid on the State 
assessment roll are delinquent. Thereupon the same penalties 
shall attach as attach in the case of other taxes. 

The taxes levied under the provisions of this act shall consti- 
tute a lien upon the property and franchises of every kind and 
nature belonging to the companies subject to taxation on the 
State assessment roll, and that lien shall • attach on the first Mon- 
day in March of each year. Every tax herein provided for has the 
effect of a judgment against the company, and every lien created 
by this act has the effect of an execution duly levied against all 
property of the delinquent; the judgment is not satisfied nor the 
lien removed until all such taxes, penalties and costs are paid, or 
the property sold for the payment thereof. 

§ 2. Proclamation of delinquency — The Auditor of Public Ac- 
counts shall prepare a list of delinquent taxpayers and shall certify 
the same to the Governor, who shall issue his proclamation, de- 
claring these taxpayers delinquent. The proclamation shall be 
published by the Secretary of State once each week for three suc- 
cessive weeks in a daily newspaper of general circulation, pub- 
lished at the State Capital, and in one paper of general circula- 
tion published in Louisville, and in one of general circulation pub- 
lished in Lexington. The proclamation shall recite the fact that 
if these taxes are not paid on or before February first next 
thereafter action will be commenced to recover the taxes, and 



REPORT OF THE SPECIAL TAX COMMISSION. 205 

shall recite the additional charges and penalties which will be in- 
curred. A charge of fifty cents for each assessment shall be added 
to the amount due to cover cost of publishing the delinquent list. 

§ 3. Attorney General to file suits — As soon as possible after 
July first in each year, the Attorney General shall file suits in 
the Circuit Court of Franklin County against all companies then 
appearing delinquent, as defendants to recover the amount due 
the State. Suit shall be 'brought for ithe amount of the taxes, 
penalties and costs due, with interest at six per cent, per annum 
on the entire amount from the first day of June last preceding, 
together with 'the following costs: Five dollars for each suit 
brought, together with the actual costs of action to be allowed by 
the court. The provisions of the code relating to pleadings, proofs, 
trials and appeals are hereby made applicable to the proceedings 
herein provided for, and writ of attachments may be issued. 

Receivers may be appointed — In the case of public utility com- 
panies, the seizure and sale of whose property might result in 
damage or inconvenience to the public by stoppage of the service, 
receivers may be appointed by the court to collect the income ot 
such companies until the amount of the judgment be recovered. 
The State assessment roll shall be prima facie evidence of the 
amount of the taxes due, and of the validity of the assessment. 
Invalidity of the assessment cannot be pleaded as a defense in 
such actions, inasmuch as another remedy has been hereinbefore 
in this act provided for persons claiming to be aggrieved or in- 
jured by the assessments. 

< ARTICLE VIII. 1 

BONDS OF OFFICERS— PENALTIES THEREUNDER. 

§ 1. Bonds of officers — Bind to what — The bonds of all of- 
ficers mentioned in this act shall bind them and their sureties for 
the faithful performance of their duties and for all moneys which 
shall come to their hands by virtue or color of their offices, and 
the strict accounting of all moneys due by them to the State, or 
other taxing districts, and for the correctness of all amounts 
claimed and collected by them as commissions or compensation 
for their services. 



206 REPORT OF THE SPECIAL TAX COMMISSION. 

§ 2. Penalty — How enforced — Whenever any penalty is pro- 
vided for in this act it may, unless otherwise especially stated, 
be enforced either by indictment in the circuit court of the county 
or by action in any court having competent jurisdiction. 

§ 3. Penalty when not prescribed — When no other penalty is 
mentioned for a failure to do an act or the doing of an act forbid- 
den or required by this act, the penalty in all such cases shall not 
be less than ten nor more than five hundred dollars. 

§ 4. Officer not to retain fee — No officer named in this act 
shall retain any part of the compensation allowed his deputy or 
deputies longer than thirty days. Any officer violating the pro- 
visions of this section shall be deemed guilty of a misdemeanor, 
and, on conviction, be fined not less than five hundred dollars for 
each offense. 

§ 5. Penalties for failure of duty by deputy tax commissioner 
— The deputy tax commissioner shall, for any failure of his duty 
under the law, where no other penalty is provided, be fined in any 
sum not less than twenty-five dollars nor more than fifty dollars. 

§ 6. Remedy for non-performance of duty by officer — Anyone 
injured by failure in or the improper performance of the duties of 
the deputy tax commissioner or sheriff, shall have a remedy on 
his official bond, and the criterion of his recovery shall be the value 
of the property lost by reason of such failure. No such action shall 
be maintained unless such persons shall allege and prove that he 
made diligent efforts to have such property assessed, and offered 
to pay the taxes thereon, and on all other real property of his 
liable to assessment. 

§ 7. Clerk failing to pay redemption money — Penalty — If any 
clerk shall fail to pay the redemption money to the person entitled 
thereto upon demand, he and his sureties shall be liable for the 
same and twenty per cent, interest thereon annually from the time 
he received it until paid. 

§ 8. Selling twice — Penalty — If any sheriff or collector shall 
knowingly sell the same tract or parcel of land, or any personal 
property, more than once for the same tax, he shall be fined one 
hundred dollars, and be liable upon his official bond for all dam- 
ages which may be sustained by any party aggrieved. 

§ 9. County attorney to prosecute — The county attorney shall 
prosecute under the preceding sections, and he shall receive for 
his services twenty-five per cent, of the fine recovered. 



APPENDIX 



TABLES RELATING TO STATE 

AND COUNTY TAXATION 

BY COUNTIES 



Total Assessments. State and 
County Tax Rates, Ratio of 
Assessed to True Value of 
Farm Lands, and Rates of 
Taxes to True Value. 



REPORT OP THE SPECIAL TAX COMMISSION. 211 

STATE AT LARGE. 

Total Assessment Roll, 1912— $840,479, 194 
Estimated Average State and County Tax Rate — $1 .20 per $100 

Approximate land area 25, 715,840 acres 

Land assessed in tracts 23,791,526 acres 

Other lands 1,924,314 acres 

Percentage of land area in farms — 86% 
23,791,526 acres in tracts with improvements 

assessed at $341,895,089 or $14.37 per acre 

22, 189, 127 acres in farms with improvements, 

census value 635,459,372 or 28.64 per acre 

Probable ratio of assessed to true value — 52% 
Approximate ratio taxes to true value — .62 of 1% 

ADAIR COUNTY. 

Total Assessment Roll, 1912— $2,757,253 
State and County Tax Rate— $1 .00 per $100 

Approximate land area — _ 256,000 acres 

Land assessed in tracts _ 233,876 acres 

Other lands 22, 124 acres 

Percentage of land area in farms — 88% 
233,876 acres in tracts with inprovements, 

assessed at $1,572,914 or $ 6.73 per acre 

224,910 acres in farms with improvements, 

census value 3,271,214 or 14.53 per acre 

Probable ratio of assessed to true value — 46% 
Approximate ratio taxes to true value — .46 of 1 % 



ANDERSON COUNTY. ' • f : 

Total Assessment Roll, 1912— $3,254,959 
State and County Tax Rate— $1 .20 per $100 

Approximate land area 128,640 acres 

Land assessed in tracts 122,086 acres 

Other lands 6, 554 acres 

Percentage of land area in farms — 96% 
122,086 acres in tracts with improvements, 

assessed at $1,882,750 or $15.42 per acre 

122,273 acres in farms with improvements, 

census value - 3 , 751 , 635 or 30 . 20 per acrt 

Probable ratio of assessed to true value — 51% 
Approximate ratio taxes to true value — .61 of 1% 



212 REPORT OF THE SPECIAL TAX COMMISSION. 

ALLEN COUNTY. 

Total Assessment Roll, 1912— $2,699,433 
State and County Tax Rate— $1.70 per $100 

Approximate land area 252,160 acres 

Land assessed in tracts 199,041 acres 

Other lands 53, 119 acres 

Percentage of land area in farms — 81% 
199,041 acres in tracts with improvements, 

assessed at $1,576,961 or $ 7.92 per acre 

204,681 acres in farms with improvements, 

census value - 3,421, 135 or 16.70 per acre 

Probable ratio of assessed to true value — 47% 
Approximate ratio taxes to true value — . 80 of 1 % 

BALLARD COUNTY. 

Total Assessment Roll, 1912— $3,439,549 
State and County Tax Rate— $1 .20 per $100 

Approximate land area „ 161,280 acres 

Land assessed in tracts 147,437 acres 

Other lands 13 , 843 acres 

Percentage of land area in farms — 90% 
147,437 acres in tracts with improvements, 

assessed at $2,115,743 or $14.35 per acre 

145, 185 acres in farms with improvements, 

census value 5,751,733 or 39.61 per acre 

Probable ratio of assessed to true value — 36% 
Approximate ratio taxes to true value — .43 of 1% 

BARREN COUNTY. ' j 

• Total Assessment Roll, 1912— $5,657,161 

State and County Tax Rate— $1 .20 per $100 

Approximate land area 310,400 acres 

Land assessed in tracts 288,648 acres 

Other lands 21 , 752 acres 

Percentage of land area in farms — 96% 
288,648 acres in tracts with improvements, 

assessed at $3,095,411 or $10.71 per acre 

297 , 893 acres in farms with improvements, 

census value _ 9,012,307 or 30.25 per acre 

Probable ratio of assessed to true value — 35% 
Approximate ratio taxes to true value — .42 of 1% 



REPORT OF THE SPECIAL TAX COMMISSION. 213 

BATH COUNTY. 

Total Assessment Roll, 1912— $5,025,302 
State and County Tax Rate— $1.20 per $100 

Approximate land area 172,800 acres 

Land assessed in tracts „ 169,347 acres 

Other lands 3 , 453 acres 

Percentage of land area in farms — 83% 
169,347 acres in tracts with improvements, 

assessed at $3,502,234 or $20.67 per acre 

143, 130 acres in farms with improvements, 

census value 7,064,622 or 49.36 per acre 

Probable ratio of assessed to true value — 42 % 
Approximate ratio taxes to true value — .50 of 1% 

BELL COUNTY. 

Total Assessment Roll, 1912— $6,109,081 
State and County Tax Rate— $1 .20 per $100 

Approximate land area 245,700 acres 

Land assessed in tracts _ 223,812 acres 

Other lands 21 , 888 acres 

Percentage of land area in farms — 40% 
223,812 acres in tracts with improvements, 

assessed at $2,327,797 or $10.40 per acre 

97,956 acres in farms with improvements, 

census value 1,760,397 or 17.97 per acre 

Probable ratio of assessed to true value — 58% 
Approximate ratio taxes to true value — .70 of 1% 

BOONE COUNTY. 

Total Assessment Roll, 1912— $7,041,355 
State and County Tax Rate— $0.90 per $100 

Approximate land area 160,640 acres 

Land assessed in tracts 151,745 acres 

Other lands 8 , 895 acres 

Percentage of land area in farms — 91% 
151,745 acres in tracts with improvements, 

assessed at $4,819,497 or $31.76 per acre 

145 , 693 acres in farms with improvements, 

census value 7,420,427 or 50.93 per acre 

Probable ratio of assessed to true value — 62% 
Approximate ratio taxes to true value — .56 of 1% 



214 REPORT OF THE SPECIAL TAX COMMISSION. 

BOURBON COUNTY. 

Total Assessment Roll, 1912— $16,083,822 
State and County Tax Rate— $1. 10 per $100 

Approximate land area 194,560 acres 

Land assessed in tracts 183,886 acres 

Other lands 10, 674 acres 

Percentage of land area in farms — 97% 
183,886 acres in tracts with improvements, 

assessed at.._ $10,824,077 or $58.86 per acre 

189,796 acres in farms with improvements, 

census value 19,812,187 or 104.40 per acre 

Probable ratio of assessed to true value — 56% 
Approximate ratio taxes to true value — .62 of 1% 

BOYD COUNTY. 

Total Assessment Roll, 1912— $8,949,488 
State and County Tax Rate— $1.20 per $100 

Approximate land area 101,760 acres 

Land assessed in tracts 88,291 acres 

Other lands 13 , 469 acres 

Percentage of land area in farms — 70% 
88,291 acres in tracts with improvements, 

assessed at $1,313,305 or $14.87 per acre 

71,570 acres in farms with improvements, 

census value 1,819,746 or 25.42 per acre 

Probable ratio of assessed to true value — 58.5% 
Approximate ratio taxes to true value — .70 of 1% 

BOYLE COUNTY. j , [ ] 

Total Assessment Roll, 1912— $9,001,684 
State and County Tax Rate— $0.90 per $100 

Approximate land area 119,040 acres 

Land assessed in tracts 111,635 acres 

Other lands 7 , 405 acres 

Percentage of land area in farms — 93% 
111,635 acres in tracts with improvements, 

assessed at $3,869,610 or $34.66 per acre 

110,518 acres in farms with improvements, 

census value 7,787,851 or 70.47 per acre 

Probable ratio of assessed to true value — 49% 
Approximate ratio taxes to true value — . 44 of 1 % 



REPORT OF THE SPECIAL TAX COMMISSION. 215 

I BRACKEN COUNTY. 

Total Assessment Roll, 1912— $3,645,411 
State and County Tax Rate— $1 .04 per $100 

Approximate land area 130,560 acres 

Land assessed in tracts 125,534 acres 

Other lands 5 , 026 acres 

Percentage of land area in farms — 94% 
125,534 acres in tracts with improvements, 

assessed at $2,346,642 or $18.69 per acre 

122,451 acres in farms with improvements, 

census value 5,492,605 or 44.86 per acre 

Probable ratio of assessed to true value — 42% 
Approximate ratio taxes to true value — .44 of 1% 

BREATHITT COUNTY. \ ) 

Total Assessment Roll, 1912— $2,568,329 
State and County Tax Rate (no report) per $100 

Approximate land area 309,120 acres 

Land assessed in tracts (estimated) 275,000 acres 

Other lands 35 , 000 acres 

Percentage of land area in farms — 85% 
275,000 acres in tracts with improvements, 

assessed at _ $1,573,306 or $5.72 per acre 

261,943 acres in farms with improvements, 

census value 2,457,403 or 9.38 per acre 

Probable ratio of assessed to true value — 61% 
Approximate ratio taxes to true value — (no report) 

BRECKENRIDGE COUNTY. 

Total Assessment Roll, 1912— $4,729,419 
State and County Tax Rate— $1. 13 per $100 

Approximate land area 363,520 acres 

Land assessed in tracts 325,973 acres 

Other lands 37, 547 acres 

Percentage of land area in farms — 93% 
325,973 acres in tracts with improvements, 

assessed at.......... $2,409,984 or $ 7.39 per acre 

339,369 acres in farms with improvements, 

census value 4, 174,672 or 12.30 per acre 

Probable ratio of assessed to true value — 60% 
Approximate ratio taxes to true value — ,68 of 1% 



216 REPORT OF THE SPECIAL TAX COMMISSION. 

BULLITT COUNTY. 

Total Assessment Roll, 1912— $3,082,277 
State and County Tax Rate— $1 . 10 per $100 

Approximate land area 197,120 acres 

Land assessed in tracts 177,538 acres 

Other lands 19, 582 acres 

Percentage of land area in farms — 80% 
177,538 acres in tracts with improvements, 

assessed at .....$1,810,948 or $10.20 per acre 

157,051 acres in farms with improvements, 

census value 3,067,745 or 19.54 per acre 

Probable ratio of assessed to true value — 52% 
Approximate ratio taxes to true value — .57 of 1% 

BUTLER COUNTY. 

Total Assessment Roll, 1912— $2,758,348 
State and County Tax Rate— $0.90 per $100 

Approximate land area 266,880 acres 

Land assessed in tracts 243,306 acres 

Other lands 23 , 574 acres 

Percentage of land area in farms — 91% 

245,000 (estimated) acres in tracts with improvements, 

assessed at $1,733,344 or $ 7.07 per acre 

242,729 acres in farms with improvements, 

census value 2,385,305 or 9.83 per acre 

Probable ratio of assessed to true value — 72% 
Approximate ratio taxes to true value — .65 of 1% 

CALDWELL COUNTY. 

Total Assessment Roll, 1912— $3,481,563 
State and County Tax Rate— $1 . 15 per $100 

Approximate land area 206,080 acres 

Land assessed in tracts 191,759 acres 

Other lands 14,321 acres 

Percentage of land area in farms — 95% 
203,500 acres in tracts with improvements, 

assessed at $2,023,747 or $ 9.94 per acre 

195,442 acres in farms with improvements, 

census value ...". 3 , 037 , 150 or 15 . 54 per acre 

Probable ratio of assessed to true value — 64% 
Approximate ratio taxes to true value — .74 of 1% 



REPORT OF THE SPECIAL TAX COMMISSION. 217 

CALLOWAY COUNTY. 

Total Assessment Roll, 1912— $4,945,233 
State and County Tax Rate— $1 . 15 per $100 

Approximate land area 263,680 acres 

Land assessed in tracts 245,977 acres 

Other lands 17, 703 acres 

Percentage of land area in farms — 92% 
245,977 acres in tracts with improvements, 

assessed at $2,871 ,976 or $11.66 per acre 

241,372 acres in farms with improvements, 

census value 4,938,940 or 20.46 per acre 

Probable ratio of assessed to true value — 57% 
Approximate ratio taxes to true value — .67 of 1% 

CAMPBELL COUNTY. 

Total Assessment Roll, 1912— $25,146,697 
State and County Tax Rate— $0.81 per $100 

Approximate land area 92,800 acres 

Land assessed in tracts 91,328 acres 

Other lands 1 ,472 acres 

Percentage of land area in farms — 95% 
91,328 acres in tracts with improvements, 

assessed at $4,139,086 or $45.32 per acre 

88,274 acres in farms with improvements, 

census value „ 5,405, 172 or 61.23 per acre 

Probable ratio of assessed to true value — 74% 
Approximate ratio taxes to true value — .60 of 1% 

CARLISLE COUNTY. 

Total Assessment Roll, 1912— $2,800,977 
State and County Tax Rate— $1 . 10 per $100 

Approximate land area 126,720 acres 

Land assessed in tracts 107,793 acres 

Other lands 18,927 acres 

Percentage of land area in farms — 82% 
107,793 acres in tracts with improvements, 

assessed at $1,823,793 or $16.93 per acre 

103,900 acres in farms with improvements, 

census value 3,936,746 or 37.89 per acre 

Probable ratio of assessed to true value — 45% 
Approximate ratio taxes to true value — .81 of 1% 



218 REPORT OF THE SPECIAL TAX COMMISSION. 

CARROLL COUNTY. 

Total Assessment Roll, 1912— $3, 139, 103 
State and County Tax Rate— $1.00 per $100 

Approximate land area 84,480 acres 

Land assessed in tracts 80,764 acres 

Other lands 3, 716 acres 

Percentage of land area in farms — 95% 
80, 764 acres in tracts with improvements, 

assessed at $1,717,266 or $21.26 per acre 

80,519 acres in farms with improvements, 

census value 3,447,196 or 42.80 per acre 

Probable ratio of assessed to true value — 50% 
Approximate ratio taxes to true value — .50 of 1% 

CARTER COUNTY. i 

Total Assessment Roll, 1912— $2,559,391 
State and County Tax Rate— $1 . 70 per $100 

Approximate land area 264,320 acres 

Land assessed in tracts „ 232,679 acres 

Other lands 31 , 641 acres 

Percentage of land area in farms — 92% 
232,679 acres in tracts with improvements, 

assessed at $1,325,165 or $ 5.69 per acre 

241,751 acres in farms with improvements, 

census value 2,818,860 or 13.60 per acre 

Probable ratio of assessed to true value — 42% 
Approximate ratio taxes to true value — .71 of 1% 

CASEY COUNTY. . i : j 

Total Assessment Roll, 1912— $2,286, 181 
State and County Tax Rate— $1.20 per $100 

Approximate land area 242,560 acres 

Land assessed in tracts (estimated) 230,600 acres 

Other lands (estimated) 12,000 acres 

Percentage of land area in farms — 92% 

230,600 (estimated) acres in tracts with improvements, 

assessed at $1,567,970 or $ 6.80 per acre 

223, 143 acres in farms with improvements, 

census value 2,764,330 or 12.40 per acre 

Probable ratio of assessed to true value — 55% 
Approximate ratio taxes to true value — .66 of 1% 



REPORT OF THE SPECIAL TAX COMMISSION. 219 

CHRISTIAN COUNTY. 

Total Assessment Roll, 1912— $11,704,505 
State and County Tax Rate— $1.20 per $100 

Approximate land area 464,000 acres 

Land assessed in tracts 416,305 acres 

Other lands 47, 695 acres 

Percentage of land area in farms — 90% 
416,305 acres in tracts with improvements, 

assessed at. $5,933,750 or $14.25 per acre 

417,763 acres in farms with improvements, 

census value 11,203,650 or 26.82 per acre 

Probable ratio of assessed to true value — 53% 
Approximate ratio taxes to true value — . 64 of 1 % 

CLARK COUNTY. 

Total Assessment Roll, 1912— $11,592,620 
State and County Tax Rate— $0.90 per $100 

Approximate land area 169,600 acres 

Land assessed in tracts 156,557 acres 

Other lands 13 , 043 acres 

Percentage of land area in farms — 88% 
156,557 acres in tracts with improvements, 

assessed at $5,878,700 or $37.55 per acre 

149,935 acres in farms with improvements, 

census value 12,530,590 or 83.57 per acre 

Probable ratio of assessed to true value — 45% 
Approximate ratio taxes to true value — .41 of 1% 

CLAY COUNTY. 

Total Assessment Roll, 1912— $2,412,461 
State and County Tax Rate— $1 . 10 per $100 

Approximate land area.... 305,920 acres 

Land assessed in tracts ~ 287,313 acres 

Other lands 18 , 607 acres 

Percentage of land area in farms — 80% 
287,313 acres in tracts with improvements, 

assessed at _ $1,532,110 or $ 5.33 per acre 

244,214 acres in farms with improvements, 

census value 2,322,346 or 9.51 per acre 

Probable ratio of assessed to true value — 56% 
Approximate ratio taxes to true value — .67 of 1% 



220 REPORT OF THE SPECIAL TAX COMMISSION. 

CLINTON COUNTY. 

Total Assessment Roll, 1912— $1,300,434 
State and County Tax Rate— $1.00 per $100 

Approximate land area 149,120 acres 

Land assessed in tracts 120,832 acres 

Other lands 28, 288 acres 

Percentage of land area in farms — 80% 
120,832 acres in tracts with improvements, 

assessed at .- $ 862,384 or $ 7. 14 per acre 

119,926 acres in farms with improvements, 

census value 1,479,081 or 12.33 per acre 

Probable ratio of assessed to true value — 58% 
Approximate ratio taxes to true value — .58 of 1% 

CRITTENDEN COUNTY. 

Total Assessment Roll, 1912— $3,325,380 
State and County Tax Rate— $1.36 per $100 

Approximate land area 250,240 acres 

Land assessed in tracts 219,654 acres 

Other lands_ 30, 586 acres 

Percentage of land area in farms — 86% 
219,654 acres in tracts with improvements, 

assessed at $1,755,816 or $ 7.99 per acre 

216,088 acres in farms with improvements, 

census value 2,952,821 or 13.66 per acre 

Probable ratio of assessed to true value — 58% 
Approximate ratio taxes to true value — .79 of 1% 

CUMBERLAND COUNTY. 

Total Assessment Roll, 1912— $1,915,851 
State and County Tax Rate— $1 .03 per $100 

Approximate land area 247,680 acres 

Land assessed in tracts 160,644 acres 

Other lands 87 , 036 acres 

Percentage of land area in farms — 67% 
160,644 acres in tracts with improvements, 

assessed at ; $1,269,018 or $ 7.90 per acre 

164,757 acres in farms, with improvements, 

census value 2,131,169 or 12.94 per acre 

Probable ratio of assessed to true value — 61% 
Approximate ratio taxes to true value — .63 of 1% 



REPORT OF THE SPECIAL TAX COMMISSION. 221 

DAVIESS COUNTY. 

Total Assessment Roll, 1912— $17,376,711 
State and County Tax Rate— $1.00 per $100 

Approximate land area 305,920 acres 

Land assessed in tracts 273,299 acres 

Other lands „ 32, 691 acres 

Percentage of land area in farms — 87% 
273,229 acres in tracts with improvements, 

assessed at._ $6,755,412 or $24.72 per acre 

267,062 acres in farms, with improvements, 

census value 14, 175,347 or 53 .08 per acre 

Probable ratio of assessed to true value — 16.6% 
Approximate ratio taxes to true value — .47 of 1% 

EDMONSON COUNTY. 

Total Assessment Roll, 1912— $1,928,046 
State and County Tax Rate— $0.88 per $100 

Approximate land area 197,120 acres 

Land assessed in tracts (estimated) 180,900 acres 

Other lands (estimated) 16,220 acres 

Percentage of land area in farms — 94% 
180,900 acres in tracts with improvements, 

assessed at $1,267,098 or $ 7.00 per acre 

184,382 acres in farms, with improvements, 

census value 1,798,135 or 9.75 per acre 

Probable ratio of assessed to true value — 71 .8% 
Approximate ratio taxes to true value — .63 of 1% 

ELLIOTT COUNTY. 

Total Assessment Roll, 1912— $1,015,649 
State and County Tax Rate— $1 . 15 per $100 

Approximate land area 168,320 acres 

Land assessed in tracts 137,005 acres 

Other lands 31,315 acres 

Percentage of land area in farms — 89% 
137,005 acres in tracts with improvements, 

assessed at $ 684, 240 or $ 4.99 per acre 

149,698 acres in farms with improvements, 

census value 1,181, 070 or 7 . 89 per acre 

Probable ratio of assessed to true value — 63% 
Approximate ratio taxes to true value — .73 of 1% 



222 REPORT OF THE SPECIAL TAX COMMISSION. 

ESTILL COUNTY. 

Total Assessment Roll, 1912— $1,457,990 
State and County Tax Rate— $1.45 per $100 

Approximate land area 162,560 acres 

Land assessed in tracts 129,715 acres 

Other lands 32 , 845 acres 

Percentage of land area in farms — 88% 
129, 715 acres in tracts with improvements, 

assessed at _ $ 980,560 or $ 7.56 per acre 

142 , 824 acres in farms with improvements, 

census value 1,984,767 or 13.90 per acre 

Probable ratio of assessed to true value — 54 .4% 
Approximate ratio taxes to true value — .79 of 1% 

FAYETTE COUNTY. 

Total Assessment Roll, 1912— $36,423,810 
State and County Tax Rate — $1 . 15 per $100 

Approximate land area 172,160 acres 

Land assessed in tracts 179,860 acres. 

Other lands 

(Note: The acreage can not be reconciled.) 
Percentage of land area in farms — 96% 
179,860 acres in tracts with improvements, 

assessed at.— $13,378,361 or $74.38 per acre 

165,541 acres in farms with improvements, 

census value 22,744,934 or 137.38 per acre 

Probable ratio of assessed to true value — 54% 
Approximate ratio taxes to true value — .62 of 1% 

FLEMING COUNTY. , 

Total Assessment Roll, 1912— $5,993,984 
State and County Tax Rate— $1.20 per $100 

Approximate land area 208,000 acres 

Land assessed in tracts 213,674 acres 

Other lands 

(Note: This acreage can not be reconciled.) 
Percentage of land area in farms — 103% 
213,674 acres in tracts with improvements, 

assessed at $3 , 920 , 289 or $18 . 35 per acre 

213,666 acres in farms with improvements, 

census value 9,059,308 or 42.40 per acre 

Probable ratio of assessed to true value — 43% 
Approximate ratio taxes to true value — .52 of 1% 



REPORT OF THE SPECIAL TAX COMMISSION. 223 

FLOYD COUNTY. 

Total Assessment Roll, 1912— $3,394,523 
State and County Tax Rate— $1 .20 per $100 

Approximate land area 255,360 acres 

Land assessed in tracts 335,931 acres 

Other lands 

(Note: This acreage can not be reconciled.) 
Percentage of land area in farms — 92% 
335,931 acres in tracts with improvements, 

assessed at $2,032,933 or $ 6.05 per acre 

235,190 acres in farms with improvements, 

census value 3,118,948 or 13.26 per acre 

Probable ratio of assessed to true value — 46% 
Approximate ratio taxes to true value — .55 of 1% 

FRANKLIN COUNTY. 

Total Assessment Roll, 1912— $8,306,924 
State and County Tax Rate— $1.25 per $100 

Approximate land area 127,360 acres 

Land assessed in tracts (estimated) 122,902 acres 

Other lands 4,458 acres 

Percentage of land area in farms — 98% 
122,902 acres in tracts with improvements, 

assessed at $3,094,322 or $25.18 per acre 

125,330 acres in farms with improvements, 

census value 5,738,587 or 45.78 per acre 

Probable ratio of assessed to true value — 55% 
Approximate ratio taxes to true value — .69 of 1% 

FULTON COUNTY. 

Total Assessment Roll, 1912— $5,071,575 
State and County Tax Rate — $1 . 15 per $100 

Approximate land area 123,520 acres 

Land assessed in tracts 113,574 acres 

Other lands 9 , 946 acres 

Percentage of land area in farms — 73% 
113,574 acres in tracts with improvements, 

assessed at. $2,188,316 or $19.27 per acre 

89,892 acres in farms with improvements, 

census value 4,804,134 or 53.44 per acre 

Probable ratio of assessed to true value — 36% 
Approximate ratio taxes to true value — .41 of 1% 



224 REPORT OP THE SPECIAL TAX COMMISSION. 

GALLATIN COUNTY. 

Total Assessment Roll, 1912— $1,319,348 
State and County Tax Rate— $1 . 10 per $100 

Approximate land area 69,760 acres 

Land assessed in tracts 58,978 acres 

Other lands 10, 782 acres 

Percentage of land area in farms — 84% 
58,978 acres in tracts with improvements, 

assessed at $ 996 , 205 or $16 . 89 per acre 

58 , 620 acres in farms with improvements, 

census value 2,147,280 or 36.63 per acre 

Probable ratio of assessed to true value — 46% 
Approximate ratio taxes to true value — .51 of 1% 

GARRARD COUNTY. 

Total Assessment Roll, 1912— $6,488,326 
State and County Tax Rate— $1 .20 per $100 

Approximate land area 151,680 acres 

Land assessed in tracts 133,862 acres 

Other lands 17,818 acres 

Percentage of land area in farms — 84% 
133,862 acres in tracts with improvements, 

assessed at $4,325,120 or $32.31 per acre 

127,788 acres in farms with improvements, 

census value 8,018,299 or 62.75 per acre 

Probable ratio of assessed to true value — 51.5% 
Approximate ratio taxes to true value — .62 of 1% 

GRANT COUNTY. 

Total Assessment Roll, 1912— $3,704,514 
State and County Tax Rate— $1 . 15 per $100 

Approximate land area 168,960 acres 

Land assessed in tracts 158,430 acres 

Other lands 10, 530 acres 

Percentage of land area in farms — 93% 
158,430 acres in tracts with improvements, 

assessed at $2,699,176 or $17.03 per acre 

156,483 acres in farms with improvements, 

census value 5,634,765 or 36.01 per acre 

Probable ratio of assessed to true value — 47% 
Approximate ratio taxes to true value — . 54 of 1 % 



REPORT OF THE. SPECIAL TAX COMMISSION. 225 

GRAVES COUNTY. 

Total Assessment Roll, 1912— $11,603, 185 
State and County Tax Rate— $1 .20 per $100 

Approximate land area 352,640 acres 

Land assessed in tracts (estimated) 334,000 acres 



Other lands (estimated)— 18,640 acres 

Percentage of land area in farms — 95% 

334,000 (estimated) acres in tracts with improvements, 

assessed at $5,451,734 or $16.32 per acre 

335,830 acres in farms with improvements, 

census value 9,375,403 or 27.92 per acre 

Probable ratio of assessed to true value — 58.5% 
Approximate ratio taxes to true value — .70 of 1% 



GRAYSON COUNTY. I ' 

Total Assessment Roll, 1912— $2,752,913 
State and County Tax Rate— $1 . 17 per $100 

Approximate land area 318,080 acres 

Land assessed in tracts 289,267 acres 



Other lands 28,813 acres 

Percentage of land area in farms — 93% 
289,267 acres in tracts with improvements, 

assessed at __ $1,534,467 or $ 5.30 per acre 

295,551 acres in farms with improvements, 

census value 3,573,784 or 12.09 per acre 

Probable ratio of assessed to true value — 44% 
Approximate ratio taxes to true value — .52 of 1% 



GREEN COUNTY. 

Total Assessment Roll, 1912— $1,410,519 
State and County Tax Rate— $1.20 per $100 

Approximate land area 178,560 acres 

Land assessed in tracts 154,679 acres 



Other lands 23, 881 acres 

Percentage of land area in farms — 94% 
154,679 acres in tracts with improvements, 

assessed at $ 979,081 or $ 6.33 per acre 

167,375 acres in farms with improvements, 

census value 3,153,496 or 18.84 per acre 

Probable ratio of assessed to true value — 33.6% 
Approximate ratio taxes to true value — .40 of 1% 

8 



226 REPORT OP THE SPECIAL TAX COMMISSION. 

GREENUP COUNTY. 

Total Assessment Roll, 1912— $2,738,468 
State and County Tax Rate— $1 .20 per $100 

Approximate land area 221,440 acres 

Land assessed in tracts (estimated) 193,000 acres 

Other lands (estimated) 28,000 acres 

Percentage of land area in farms — 89% 

193,000 (estimated) acres in tracts with improvements, 

assessed at $1,341,900 or $ 6.95 per acre 

197,021 acres in farms with improvements, 

census value 2,850,590 or 14.46 per acre 

Probable ratio of assessed to true value — 48% 
Approximate ratio taxes to true value — .58 of 1% 

HANCOCK COUNTY. 

Total Assessment Roll, 1912— $2,098,812 
State and County Tax Rate— $1 . 15 per $100 

Approximate land area 123,520 acres 

Land assessed in tracts 120,028 acres 

Other lands 3 , 492 acres 

Percentage of land area in farms — 88% 
120,028 acres in tracts with improvements, 

assessed at $1,404,611 or $11.70 per acre 

108,588 acres in farms with improvements, 

census value 2,152,052 or 19.82 per acre 

Probable ratio of assessed to true value — 59% 
Approximate ratio taxes to true value — .68 of 1% 

HARDIN COUNTY. ! 

Total Assessment Roll, 1912— $5,730,781 
State and County Tax Rate— $0.95 per $100 

Approximate land area 387,840 acres 

Land assessed in tracts 365,683 acres 

Other lands _ 22, 157 acres 

Percentage of land area in farms — 95% 
365,683 acres in tracts with improvements, 

assessed at « $3,493,844 or $ 9.55 per acre 

367, 128 acres in farms with improvements, 

census value 7,475,233 or 20.36 per acre 

Probable ratio of assessed to true value — 47% 
Approximate ratio taxes to true value — .45 of 1% 



REPORT OF THE SPECIAL TAX COMMISSION. 227 

HARLAN COUNTY. 

Total Assessment Roll, 1912— $3,996,744 
State and County Tax Rate— $1 . 10 per $100 

Approximate land area 305,920 acres 

Land assessed in tracts 269,980 acres 

Other lands 35 , 940 acres 

Percentage of land area in farms — 53 % 
269,980 acres in tracts with improvements, 

assessed at $2,585,580 or $ 9.58 per acre 

161,926 acres in farms with improvements, 

census value _ 3,272,411 or 20.21 per acre 

Probable ratio of assessed to true value — 47.4% 
Approximate ratio taxes to true value — -.52 of 1% 

HARRISON COUNTY. ; ' 

Total Assessment Roll, 1912— $8,309, 141 
State and County Tax Rate— $1 . 125 per $100 

Approximate land area 199,040 acres 

Land assessed in tracts (estimated) 192,600 acres 

Other lands (estimated) 6,440 acres 

Percentage of land area in farms — 97% 
192 , 600 acres in tracts with improvements, 

assessed at $5,529,770 or $28.70 per acre 

192,849 acres in farms with improvements, 

census value 11 , 058 , 070 or 57 . 34 per acre 

Probable ratio of assessed to true value — 50% 
Approximate ratio taxes to true value — . 56 of 1 % 

HART COUNTY. 

Total Assessment Roll, 1912— $3,681,737 
State and County Tax Rate— $1 . 10 per $100 

Approximate land area 275,200 acres 

Land assessed in tracts 240,352 acres 

Other lands 34, 848 acres 

Percentage of land area in farms — 89% 
240,352 acres in tracts with improvements, 

assessed at._ $2,093,308 or $ 8.70 per acre 

246,407 acres in farms with improvements, 

census value 6,239,836 or 25.32 per acre 

Probable ratio of assessed to true value — '34.4% 
Approximate ratio taxes to true value — -.38 of 1% 



228 REPORT OF THE SPECIAL TAX COMMISSION. 

HENDERSON COUNTY. ! 

Total Assessment Roll, 1912— $13,530, 131 
State and County Tax Rate— $1 . 18 per $100 

Approximate land area 278,400 acres 

Land assessed in tracts 274,613 acres 



Other lands „ 3, 787 acres 

Percentage of land area in farms — £3% 
274,613 acres in tracts with improvements, 

assessed at $6,333,821 or $23.07 per acre 

231,677 acres in farms with improvements, 

census value 10,389,434 or 44.85 per acre 

Probable ratio of assessed to true value — 51.5% 
Approximate ratio taxes to true value — .61 of 1% 



HENRY COUNTY. 

J 

Total Assessment Roll, 1912— $5,639,961 
State and County Tax Rate— $1 . 15 per $100 

Approximate land area 193,920 acres 

Land assessed in tracts (estimated)— 177,000 acres 



Other lands (estimated) _ 16,900 acres 

Percentage of land area in farms — 92% 
177,000 acres in tracts with improvements, 

assessed at._ $4,031,438 or $22.77 per acre 

178,217 acres in farms with improvements, 

census value 8,898,332 or 49.92 per acre 

Probable ratio of assessed to true value — 45.6% 
Approximate ratio taxes to true value — .52 of 1% 



HICKMAN COUNTY. 

Total Assessment Roll, 1912— $4, 149,908 
State and County Tax Rate— $1.20 per $100 

Approximate land area 144,000 acres 

Land assessed in tracts 148,467 acres 



Other lands 

(Note: This acreage is not reconcilable.) 
Percentage of land area in farms — 93 % 
148,467 acres in tracts with improvements, 

assessed at $2,829,462 or $19.06 per acre 

133,494 acres in farms with improvements, 

census value 5,309,019 or 39.77 per acre 

Probable ratio of assessed to true value — 48% 
Approximate ratio taxes to true value — .58 of 1% 



REPORT OF THE SPECIAL TAX COMMISSION. 229 

HOPKINS COUNTY. 

Total Assessment Roll, 1912— $7,054,608 
State and County Tax Rate— $1.00 per $100 

Approximate land area 349,440 acres 

Land assessed in tracts '. 341,596 acres 

Other lands 7 , 844 acres 

Percentage of land area in farms — 85% 
341,596 acres in tracts with improvements, 

assessed at _ . $3, 178,823 or $ 9.30 per acre 

298,263 acres in farms with improvements, 

census value 7,742,602 or 25.96 per acre 

Probable ratio of assessed to true value — -36% 
Approximate ratio taxes to true value — .36 of 1% 

JACKSON COUNTY. 

Total Assessment Roll, 1912— $7,054,608 
State and County Tax Rate— $1 .00 per $100 

Approximate land area 213,120 acres 

Land assessed in tracts „ 198,336 acres 

Other lands 14, 784 acres 

Percentage of land area in farms — 72% 
198,336 acres in tracts with improvements, 

assessed at $1,153,593 or $ 5.82 per acre 

153,561 acres in farms with improvements, 

census value 1,109,253 or 7.22 per acre 

Probable ratio of assessed to true value — 80.6% 
Approximate ratio taxes to true value — .81 of 1% 

JEFFERSON COUNTY. 

Total Assessment Roll, 1912— $202,725,850 
State and County Tax Rate— $0.96}< per $100 

Approximate land area .' * 247,680 acres 

Land assessed in tracts (estimated) 212,700 acres 

Other lands 34, 980 acres 

Percentage of land area in farms — 79% 
212,700 acres in tracts with improvements, 

assessed at $15,505,750 or $72.90 per acre 

196,707 acres in farms with improvements, 

census value 23,715,574 or 120.55 per acre 

Probable ratio of assessed to true value — '60.5% 
Approximate ratio taxes to true value — -.58 of 1% 



230 REPORT OF THE SPECIAL TAX COMMISSION. 

JESSAMINE COUNTY. 

Total Assessment Roll, 1912— $7,054,800 
State and County Tax Rate— $1.10 per $100 

Approximate land area 110,080 acres 

Land assessed in tracts _ 107,084 acres 

Other lands 2 , 996 acres 

Percentage of land area in farms — -91% 
107,084 acres in tracts with improvements, 

assessed at $4,815,951 or $44.97 per acre 

99,887 acres in farms with improvements, 

census value 8,529,690 or 85.39 per acre 

Probable ratio of assessed to true value — -52.7% 
Approximate ratio taxes to true value — .58 of 1% 

JOHNSON COUNTY. 

Total Assessment Roll, 1912— $2,983,405 
State and County Tax Rate— $1 .20 per $100 

Approximate land area 171,520 acres 

Land assessed in tracts 179,842 acres 

Other lands 

(Note: These figures are not reconcilable.) 
Percentage of land area in farms — -95% 
179,842 acres in tracts with improvements, 

assessed at $1,605,499 or $ 8.93 per acre 

163,635 acres in farms with improvements, 

census value 2,474,899 or 15.12 per acre 

Probable ratio of assessed to true value — 59% 
Approximate ratio taxes to true value — '.71 of 1% 

KENTON COUNTY. 

Total Assessment Roll, 1912— $31,286,343 
State and County Tax Rate — $1 . 12 per $100 

Approximate land area 104,320 acres 

Land assessed in tracts , 97,835 acres 

Other lands 6,485 acres 

Percentage of land area in farms — 83% 
97,835 acres in tracts with improvements, 

assessed at $4,410,363 or $45.08 per acre 

86,408 acres in farms with improvements, 

census value 4,964,565 or 57.45 per acre 

Probable ratio of assessed to true value— 78.5% 
Approximate ratio taxes to true value — .88 of 1% 



REPORT OF THE SPECIAL TAX COMMISSION. 231 

KNOTT COUNTY. 

Total Assessment Roll, 1912— $1,962,744 
State and County Tax Rate (no report) per $100 

Approximate land area - 222,720 acres 

Land assessed in tracts (estimated) 194,570 acres 



Other lands . 28, 150 acres 

Percentage of land area in farms — 91% 

194,570 (est.) acres in tracts with improvements, 

assessed at .$1,056,032 or $ 5.43 per acre 

202,438 acres in farms with improvements, 

Census value „. 1,686,025 or 8.33 per acre 

Probable ratio of assessed to true value — 65% 
Approximate ratio taxes to true value — (no report.) 



KNOX COUNTY. 

Total Assessment Roll, 1912— $3,799,548 
State and County Tax Rate— $0.85 per $100 

Approximate land area . 227,840 acres 

Land assessed in tracts 203,374 acres 



Other lands 24,466 acres 

Percentage of land area in farms — 82% 
203,374 acres in tracts with improvements, 

assessed at ...$2,028,548 or $ 9.97 per acre 

187,590 acres in farms with improvements, 

census value 2,478,881 or 13.22 per acre 

Probable ratio of assessed to true value — 75.4% 
Approximate ratio taxes to true value — .64 of 1% 



LARUE COUNTY. 

Total Assessment Roll, 1912— $3,341,282 
State and County Tax Rate— $1 .00 per $100 

Approximate land area 184,320 acres 

Land assessed in tracts (estimated) 155,200 acres 



Other lands _ 29, 120 acres 

Percentage of land area in farms — 83% 
155,200 (estimated) acres in tracts with 

improvements, assessed at $2,129,638 or $13.72 per acre 

153,315 acres in farms with improvements, 

census value.. „ 3,959,859 or 25.82 per acre 

Probable ratio of assessed to true value — 53% 
Approximate ratio taxes to true value — .53 of 1% 



232 REPORT OF THE SPECIAL TAX COMMISSION. 

LAUREL COUNTY. 

Total Assessment Roll, 1912— $2,850,393 
State and County Tax Rate $1.20 per $100 

Approximate land area 286,080 acres 

Land assessed in tracts _ 238,252 acres 

Other lands .. „ 47,828 acres 

Percentage of land area in farms — 66% 
238,252 acres in tracts with improvements, 

assessed at $1,484,286 or $ 6.23 per acre 

188,248 acres in farms with improvements, 

census value 2,433,489 or 12.93 per acre 

Probable ratio of assessed to true value — 48% 
Approximate ratio taxes to true value — .58 oi\% 

LAWRENCE COUNTY. 

Total Assessment Roll, 1912— $2,917,700 
State and County Tax Rate $1.20 per $100 

Approximate land area 270,080 acres 

Land assessed in tracts (estimated) 259,000 acres 

Other lands _ 1 1 , 000 acres 

Percentage of land area in farms — 96% 
259,000 acres in tracts with improvements, 

assessed at $1,540,085 or $ 5.95 per acre 

260,485 acres in farms with improvements, 

census value 2,833,114 or 10.88 per acre 

Probable ratio of assessed to true value — 54. 7% 
Approximate ratio taxes to true value — .66 of 1% 

LEE COUNTY. 

Total Assessment Roll, 1912— $1,277,956 
State and County Tax Rate— $1 . 20 per $100 

Approximate land area .'. 127 , 360 acres 

Land assessed in tracts : 127 , 827 acres 

Other lands _ 

(Note: These figures are not reconcilable.) 
Percentage of land area in farms — '68% 
127,872 acres in tracts with improvements, 

assessed at _ $ 573,652 or $ 4.48 per acre 

86,419 acres in farms with improvements, 

census value 783,938 or 9.06 per acre 

Probable ratio of assessed to true value — 49.5% 
Approximate ratio taxes to true value — .59 of 1% 



REPORT OF THE SPECIAL TAX COMMISSION. 233 

LESLIE COUNTY. 

Total Assessment Roll, 1912— $2,222,412 
State and County Tax Rate— $1 .20 per $100 

Approximate land area _ 238,720 acres 

Land assessed in tracts 271,390 acres 



Other lands „ 

(Note: These figures are not reconcilable.) 
Percentage of land area in farms — 71% 
271,390 acres in tracts with improvements, 

assessed at $1,352,001 or $ 4.98 per acre 

169,254 acres in farms with improvements, 

census value 1,358,035 or 8.02 per acre 

Probable ratio of assessed to true value — '62% 
Approximate ratio taxes to true value — .74 of 1% 



LETCHER COUNTY. 

Total Assessment Roll, 1912— $3,323,216 
State and County Tax Rate— $1 . 15 per $100 

Approximate land area 227,200 acres 

Land assessed in tracts 255,135 acres 

Other lands 

(Note: These figures are not reconcilable.) 
Percentage of land area in farms — '68% 
255,315 acres in tracts with improvements, 

assessed at $1,623,547 or $ 6.36 per acre 

154, 166 acres in farms with improvements, 

census value 1,287,628 or 8,35 per acre 

Probable ratio of assessed to true value — -76% 
Approximate ratio taxes to true value — .87 of 1% 



LEWIS COUNTY. 

Total Assessment Roll, 1912— $2,941,217 
State and County Tax Rate— $1.25 per $100 

Approximate land area 314,240 acres 

Land assessed in tracts 285,981 acres 



Other lands.... 28, 259 acres 

Percentage of land area in farms — 78% 
285,981 acres in tracts with improvements, 

assessed at $1,838,734 or $ 6.42 per acre 

244,823 acres in farms with improvements, 

census value 3,472, 900 or 14. 18 per acre 

Probable ratio of assessed to true value — 45% 
Approximate ratio taxes to true value — '.56 of 1% 



234 REPORT OF THE SPECIAL TAX COMMISSION. 

LINCOLN COUNTY. i 

Total Assessment Roll, 1912— $6,654,097 
State and County Tax Rate— $1 . 15 per $100 

Approximate land area 216,320 acres 

Land assessed in tracts 198,595 acres 

Other lands 17 , 725 acres 

Percentage of land area in farms — 88% 
198,595 acres in tracts with improvements, 

assessed at $4,216,343 or $21.23 per acre 

190,274 acres in farms with improvements, 

census value 7,875,335 or 41.39 per acre 

Probable ratio of assessed to true value — 51% 
Approximate ratio taxes to true value — .59 of 1% 

LIVINGSTON COUNTY. , , j 

Total Assessment Roll, 1912— $3,022,838 
State and County Tax Rate— $1.20 per $100 

Approximate land area.. ,....,., ..„.„......-. 250,880 acres 

Land assessed in tracts ....,.....„„.„..„..„.„. 189,387 acres 

Other lands 61 , 493 acres 

Percentage of land area in farms — -73% 
189,387 acres in tracts with improvements, 

assessed at $1,790,292 or $9.45 per acre 

183,287 acres in farms with improvements, 

census value... 2,843,625 or 15.53 per acre 

Probable ratio of assessed to true value — '61% 
Approximate ratio taxes to true value — .73 of 1% 

LOGAN COUNTY. j r\ 

Total Assessment Roll, 1912— $6,311,370 
State and County Tax Rate— $1.29 1-6 per $100 

Approximate land area 411,520 acres 

Land assessed in tracts 326,353 acres 

Other lands 85, 167 acres 

Percentage of land area in farms — 80% 
326,353 acres in tracts with improvements, 

assessed at $3,553,961 or $10.89 per acre 

323,282 acres in farms with improvements, 

census value - 8,766,539 or 26.70 per acre 

Probable ratio of assessed to true value — 41% 
Approximate ratio taxes to true value — .53 of 1% 



REPORT OF THE SPECIAL TAX COMMISSION. 235 

LYON COUNTY. 

Total Assessment Roll, 1912— $1,780,071 
State and County Tax Rate— $1.20 per $100 

Approximate land area 177,280 acres 

Land assessed in tracts 143,116 acres 



Other lands 34, 164 acres 

Percentage of land area in farms — 62% 
143, 116 acres in tracts with improvements, 

asessed at $1,008,396 or $ 7.04 per acre 

110,305 acres in farms with improvements, 

census value 1,628,421 or 14.76 per acre 

Probable raito of assessed to true value— 47 . 7 % 
Approximate rates taxes to true value — .57 of 1% 



MADISON COUNTY. ! . 

Total Assessment Roll, 1912— $12,980,810 
State and County Tax Rate— $1 . 17 per $100 

Approximate land area 285,440 acres 

Land assessed in tracts (estimated) 258,000 acres 



Other lands 27,440 acres 

Percentage of land area in farms — 91% 

258,000 (estimated) acres in tracts with improvements, 

assessed at..._ $7,635,970 or $29.60 per acre 

260,652 acres in farms with improvements, 

census value 13,390,318 or 51.38 per acre 

Probable ratio of assessed to true value — 57.6% 
Approximate ratio taxes to true value — -.67 of 1% 



MAGOFFIN COUNTY. ; j 

Total Assessment Roll, 1912— $1,519,411 
State and County Tax Rate— $1 . 15 per $100 

Approximate land area 193,280 acres 

Land assessed in tracts 193,210 acres 



Other lands 

(Note: Data for other years show that the acreage figures are not to be reconciled.) 
Percentage of land area in farms — 102% 
193,210 acres in tracts with improvements, 

assessed at $1 , 075 , 880 or $ 5.57 per acre 

197,804 acres in farms with improvements, 

census value 1,963,557 or 9.93 per acre 

Probable ratio of assessed to true value — 56% 
Approximate ratio taxes to true value — . 64 of 1 % 



236 REPORT OF THE SPECIAL TAX COMMISSION. 

MARION COUNTY. 

Total Assessment Roll, 1912— $5, 118,287 
State and County Tax Rate— (No report) per $100 

Approximate land area.. _ 220,800 acres 

Land assessed in tracts (estimated) 196,000 acres 

Other lands (estimated) 24,800 acres 

Percentage of land area in farms — 89% 

196,000 (estimated) acres in tracts with improvements, 

assessed at $2,560,691 or $13.06 per acre 

196, 107 acres in farms with improvements, 

census value. 6,095,006 or 31.08 per acre 

Probable ratio of assessed to true value — 42% 
Approximate ratio taxes to true value — (No report) 

MARSHALL COUNTY. ■ i 

Total Assessment Roll, 1912— $3,205,643 
State and County Tax Rate— $1 . 15 per $100 

Approximate land area 209,280 acres 

Land assessed in tracts 204,938 acres 

Other lands 4 , 342 acres 

Percentage of land area in farms — '96% 
204,938 acres in tracts with improvements, 

assessed at $2,074,520 or $10.12 per acre 

199,890 acres in farms with improvements, 

census value 4,183,373 or 20.93 per acre 

Probable ratio of assessed to true value — 48% 
Approximate ratio taxes to true value — .55 of 1% 

MARTIN COUNTY. ! 

Total Assessment Roll, 1912— $1,324,904 
State and County Tax Rate — ■$ 1 .35 per $100 

Approximate land area 145,280 acres 

Land assessed in tracts 193,033 acres 

Other lands : 

(Note: These figures are not reconcilable.) 
Percentage of land area in farms — '62% 
193,033 acres in tracts with improvements, 

assessed at...„ $ 881,803 or $ 4.56 per acre 

90,347 acres in farms with improvements, 

census value 805,756 or 8.91 per acre 

Probable ratio of assessed to true value — '51% 
Approximate ratio taxes to true value — .69 of 1% 



REPORT OF THE SPECIAL TAX COMMISSION. 

MASON COUNTY. 

Total Assessment Roll, 1912— $10,486,047 
State and County Tax Rate— $1.20 per $100 



237 



Approximate land area . 

Land assessed in tracts „ 



145,280 acres 
146,569 acre3 



Other lands — _ _ - 

(Note: These figures are not reconcilable.) 
Percentage of land area in farms — 102% 
146,569 acres in tracts with improvements, 

assessed at . — _ $6,233,675 or $42.53 per acre 

147,613 acres in farms with improvements, 

census value _ „~12 , 032 , 184 or 81 . 52 per acre 

Probable ratio of assessed to true value — 52% 
Approximate ratio taxes to true value — . 62 of 1 % 



McCRACKEN COUNTY. 

Total Assessment Roll, 1912— $13,570,276 
State and County Tax Rate— $1.36 per $100 



Approximate land area_.. 
Land assessed in tracts..- 



152,960 acres 
150,347 acres 



Other lands „ 

Percentage of land area in farms — 86% 
150,347 acres in tracts with improvements, 

assessed at 

132, 106 acres in farms with improvements, 

census value _ „ 

Probable ratio of assessed to true value— 49% 
Approximate ratio taxes to true value — .67 of 1% 



2,613 acres 



.$2,939,356 or $19.55 per acre 
. 5,243,944 or 39.71 per acre 



McLEAN COUNTY. 

Total Assessment Roll, 1912— $3,223,855 
State and County Tax Rate— $1.20 per $100 



Approximate land area 

Land assessed in tracts (estimated). 



161,920 acres 
143,500 acres 



18,400 acres 



Other lands (estimated) 

Percentage of land area in farms — 88% 

143 , 500 (estimated) acres in tracts with improvements, 

assessed at _ $1,820,832 or $12.69 per acre 

142,616 acres in farms with improvements, 

census value „ 4,213,041 or 29.54 per acre 

Probable ratio of assessed to true value — 43% 
Approximate ratio taxes to true value — .52 of 1% 



238 REPORT OF THE SPECIAL TAX COMMISSION. 

MEADE COUNTY. 

Total Assessment Roll, 1912— $2,971,774 
State and County Tax Rate— $1 .20 per $100 

Approximate land area 192,640 acres 

Land assessed in tracts 188,820 acres 

by ■ 

l Other lands _ 3,820 acres 

Percentage of land area in farms — 92% 
188,820 acres in tracts with improvements, 

assessed at $1,802,432 or $ 9.55 per acre 

177,437 acres in farms with improvements, 

census value 2,915,292 or 16.43 per acre 

Probable ratio of assessed to true value — 58% 
Approximate ratio taxes to true value — .70 of 1% 

MENIFEE COUNTY. 

Total Assessment Roll, 1912— $791,783 
State and County Tax Rate— $1 . 10 per $100 

Approximate land area.... „ 129,920 acres 

Land assessed in tracts _ 120,101 acres 

Other lands „ 9, 819 acres 

Percentage of land area in farms — 74% 
120, 101 acres in tracts with improvements, 

assessed at _ $ 491 , 185 or $ 4.09 per acre 

95,700 acres in farms with improvements, 

census value 764,066 or 7.98 per acre 

Probable ratio of assessed to true value — 51% 
Approximate ratio taxes to true value — .56 of 1% 

MERCER COUNTY. 

Total Assessment Roll, 1912— $7,522,978 
State and County Tax Rate— $1 . 15 per $100 

Approximate land area 161,920 acres 

Land assessed in tracts 155,703 acres 

M **• 

M Other lands 6,217 acres 

Percentage of land area in farms — £4% 
155,703 acres in tracts with improvements, 

assessed at $4,666,780 or $29.97 per acre 

151,884 acres in farms with improvements, 

census value .. 8,508,332 or 56.02 per acre 

Probable ratio of assessed to true value — 53.5% 
Approximate ratio taxes to true value — .62 of 1% 



REPORT OF THE SPECIAL TAX COMMISSION. 239 

METCALFE COUNTY. 

Total Assessment Roll, 1912— $1,652,047 
State and County Tax Rate— $1.50 per $100 

Approximate land area 193,920 acres 

Land assessed in tracts 171,466 acres 

Other lands 22 , 454 acres 

Percentage of land area in farms — 86% 
171,466 acres in tracts with improvements, 

assessed at $1,170,701 or $ 6.82 per acre. 

165,833 acres in farms with improvements, 

census value 2,758,860 or 16.63 per acre 

Probable ratio of assessed to true value — 41% 
Approximate ratio taxes to true value — .62 of 1% 

MONROE COUNTY. 

Total Assessment Roll, 1912— $2,421,069 
State and County Tax Rate— $1.10 per $100 

Approximate land area 282,240 acres 

Land assessed in tracts 196,977 acres 

Other lands 85 , 263 acres 

Percentage of land area in farms — 72% 
196,977 acres in tracts with improvements, 

assessed at $1,419,795 or $ 7.20 per acre 

204,275 acres in farms with improvements, 

census value 2,330,624 or 11.42 per acre 

Probable ratio of assessed to true value — 63% 
Approximate ratio taxes to true value — .69 of 1% 

MONTGOMERY COUNTY. 

Total Assessment Roll, 1912— $6,595,585 
State and County Tax Rate— $1 . 19 per $100 

Approximate land area , 126,720 acres 

Land assessed in tracts „... . 118,594 acres 

Other lands 8, 126 acres 

Percentage of land area in farms — 92% 
118,594 acres in tracts with improvements, 

assessed at $3,692,525 or $31.13 per acre 

116,665 acres in farms with improvements, 

census value 8,223, 165 or 70.49 per acre 

Probable ratio of assessed to true value — 44% 
Approximate ratio taxes to true value — .52 of 1% 



240 REPORT OF THE SPECIAL TAX COMMISSION. 

MORGAN COUNTY. 

Total Assessment Roll, 1912— $2,636,241 
State and County Tax Rate— $1.20 per $100 

Approximate land area 233,600 acres 

Land assessed in tracts... 217,006 acres 



Other lands _ 16, 594 acres 

Percentage of land area in farms — 90% 
217,006 acres in tracts with improvements, 

assessed at .„ $1,890,529 or $8.71 per acre 

210,597 acres in farms with improvements, 

census value 2,392,045 or 11.36 per acre 

Probable ratio of assessed to true value — 76 . 7 % 
Approximate ratio taxes to true value — .92 of 1% 



MUHLENBERG COUNTY. 

Total Assessment Roll, 1912— $4,239, 146 
State and County Tax Rate — $1.65 per $100 

Approximate land area 302,080 acres 

Land assessed in tracts 317,636 acres 



Other lands „ 

(Note: These figures are not reconcilable.) 
Percentage of land area in farms — 81% 
317,636 acres in tracts with improvements, 

assessed at $2,237,750 or $ 7.04 per acre 

245,210 acres in farms with improvements, 

census value 4,035,443 or 16.46 per acre 

Probable ratio of assessed to true value — 43 % 
Approximate ratio taxes to true value — .71 of 1% 



NELSON COUNTY. 

Total Assessment Roll, 1912— $7,528,431 
State and County Tax Rate— $1. 10 per $100 

Approximate land area 263,040 acres 

Land assessed in tracts 245,951 acres 



Other lands 1 7 , 089 acres 

Percentage of land area in farms — 8^% 
245,951 acres in tracts with improvements, 

assessed at _ $4,025,440 or $16.36 per acre 

228,650 acres in farms with improvements, 

census value 6,688,789 or 29.25 per acre 

Probable ratio of assessed to true value — 56% 
Approximate ratio taxes to true value — .62 of 1% 



REPORT OF THE SPECIAL TAX COMMISSION. 241 

NICHOLAS COUNTY. 

Total Assessment Roll, 1912— $4,646,242 
State and County Tax Rate— $1 .00 per $100 

Approximate land area 133,120 acres 

Land assessed in tracts 122,534 acres 



Other lands 10, 586 acres 

Percentage of land area in farms — 85% 
122,534 acres in tracts with improvements, 

assessed at ...$3,207,166 or $26.17 per acre 

1 13 , 055 acres in farms with improvements, . 

census value 7,293,727 or 64.51 per acre 

Probable ratio of assessed to true value — 40.6% 
Approximate ratio taxes to true value — .41 of 1% 



OHIO COUNTY. 

Total Assessment Roll, 1912— $5,089,817 
State and County Tax Rate — $1 . 15 per $100 

Approximate land area 373,760 acres 

Land assessed in tracts 355,729 acres 



Other lands 18,031 acres 

Percentage of land area in farms — 91% 
355,729 acres in tracts with improvements, 

assessed at— $3,064,006 or $ 8.61 per acre 

338,211 acres in farms with improvements, 

census value 4,907,504 or 14.51 per acre 

Probable ratio of assessed to true value — -59% 
Approximate ratio taxes to true value — .68 of 1% 



OLDHAM COUNTY. 

Total Assessment Roll, 1912— $4, 197,680 
State and County Tax Rate — $1 .20 per $100 

Approximate land area 115,200 acres 

Land assessed in tracts 116,132 acres 



Other lands 

(Note: These figures are not reconcilable.) 
Percentage of land area in farms — '92% 
116, 132 acres in tracts with improvements, 

assessed at. $2,541,534 or $21.88 per acre 

106,214 acres in farms with improvements, 

census value 4,455,865 or 41.94 per acre 

Probable ratio of assessed to true value — 52% 
Approximate ratio taxes to true value — .62 of 1% 



242 REPORT OF THE SPECIAL TAX COMMISSION. 

OWEN COUNTY. 

Total Assessment Roll, 1912— $3,380,868 
State and County Tax Rate— $1.60 per $100 

Approximate land area 234,880 acres 

Land assessed in tracts 214,821 acres 

Other lands 20, 059 acres 

Percentage of land area in farms — 91% 
214,821 acres in tracts with improvements, 

assessed at $2,660,748 or $12.39 per acre 

213,786 acres in farms with improvements, 

census value 6,678,405 or 31.24 per acre 

Probable ratio of assessed to true value — 40% 
Approximate ratio taxes to true value — '.64 of 1% 

OWSLEY COUNTY. 

Total Assessment Roll, 1912—$ 975,488 
State and County Tax Rate — (No report) per $100 

Approximate land area 138,240 acres 

Land assessed in tracts 111,783 acres 

Other lands 26,457 acres 

Percentage of land area in farms — 80% 
111,783 acres in tracts with improvements, 

assessed at $ 671,865 or $ 6.01 per acre 

110,308 acres in farms with improvements, 

census value 986,426 or 8.94 per acre 

Probable ratio of assessed to true value — 67% 
Approximate ratio taxes to true value — (No report) 

PENDLETON COUNTY. 

Total Assessment Roll, 1912— $3,865,861 
State and County Tax Rate— $1.20 per $100 

Approximate land area 178,560 acres 

Land assessed in tracts 167,716 acres 

Other lands 10, 844 acres 

Percentage of land area in farms — 95% 
167,716 acres in tracts with improvements, 

assessed at $2,733,144 or $16.30 per acre 

169,449 acres in farms with improvements, 

census value 5,028,921 or 29.67 peracie 

Probable ratio of assessed to true value — '55% 
Approximate ratio taxes to true value — .66 of 1% 



REPORT OF THE SPECIAL TAX COMMISSION. * 243 

' PERRY COUNTY. 

Total Assessment Roll, 1912— $2,834,694 
State and County Tax Rate— $1.20 per $100 

Approximate land area 214,400 acres 

Land assessed in tracts 251,191 acres 

Other lands 

(Note: These figures are not reconcilable.) 
Percentage of land area in farms — 82% 
251, 191 acres in tracts with improvements, 

assessed at $1,287,982 or $ 5.13 per acre 

174,794 acres in farms with improvements, 

census value 1,538,118 or 8.80 per acre 

Probable ratio of assessed to true value — 58% 
Approximate ratio taxes to true value — 70 of 1%. 

PIKE COUNTY. 

Total Assessment Roll, 1912— $5,781,509 
State and County Tax Rate— $1.20 per $100 

Approximate land area 498,560 acres 

Land assessed in tracts 473,166 acres 

Other lands 25 , 394 acres 

Percentage of land area in farms — '97% 
473, 166 acres in tracts with improvements, 

assessed at $3,450,612 or $7.29 per acre 

481,370 acres in farms with improvements, 

census value 5,280,458 or 10.97 per acre 

Probable ratio of assessed to true value — 66.5% 
Approximate ratio taxes to true value — .80 of 1% 

POWELL COUNTY. i 

Total Assessment Roll, 1912—$ 872,917 
State and County Tax Rate— $1 . 15 per $100 

Approximate land area 115,840 acres 

Land assessed in tracts 80,295 acres 

Other lands 35, 545 acres 

Percentage of land area in farms — 97% 
80,295 acres in tracts with improvements, 

assessed at $ 590,310 or $ 7.33 per acre 

112, 196 acres in farms with improvements, 

census value 2,062,961 or 18.38 per acre 

Probable ratio of assessed to true value — 40% 
Approximate ratio taxes to true value — .46 of 1% 



244 . REPORT OF THE SPECIAL TAX COMMISSION. 

PULASKI COUNTY. 

Total Assessment Roll, 1912— $6,004,064 
State and County Tax Rate— $1. 10 per $100 

Approximate land area 498,560 acres 

Land assessed in tracts 399,769 acres 

Other lands 98, 791 acres 

Percentage of land area in farms — 74% 
399,769 acres in tracts with improvements, 

assessed at $3,131,790 or $ 7.83 per acre 

368, 140 acres in farms with improvements, 

census value 4,154,659 or 11.28 per acre 

Probable ratio of assessed to true value — 69.4% 
Approximate ratio taxes to true value — .76 of 1% 

ROBERTSON COUNTY. 

Total Assessment Roll, 1912— $1, 120,810 
State and County Tax Rate— $1.95 per $100 

Approximate land area... 69,760 acres 

Land assessed in tracts 62,270 acres 

Other lands 7 , 490 acres 

Percentage of land area in farms — 87% 
62,275 acres in tracts with improvements, 

assessed at $ 839,227 or $13.46 per acre 

60,525 acres in farms with improvements, 

census value 2,509,929 or 41.47 per acre 

Probable ratio of assessed to true value — 32% 
Approximate ratio taxes to true value — .62 of 1% 

ROCKCASTLE COUNTY. 

Total Assessment Roll, 1912— $1,763,055 
State and County Tax Rate— $1. 18 per $100 

Approximate land area 198,400 acres 

Land assessed in tracts 176,703 acres 

Other lands 21 , 697 acres 

Percentage of land area in farms — 86% 
176,703 acres in tracts with improvements, 

ftp* assessed at._ $ 966,441 or $5.47 per acre 

170,855 acres in farms with improvements, 

census value 1,796,867 or 10.52 per acre 

Probable ratio of assessed to true value — 52% 
Approximate ratio taxes to true value — .61 of 1% 



REPORT OF THE SPECIAL TAX COMMISSION. 245 

ROWAN COUNTY. 

Total Assessment Roll, 1912— $1,315,981 
State and County Tax Rate— $1.20 per $100 

Approximate land area 174,080 acres 

Land assessed in tracts 229,885 acres 

Other lands 

(Note: These returns are not reconcilable.) 
Percentage of land area in farms — 74% 
229,885 acres in tracts with improvements, 

assessed at $ 673,396 or $ 2.93 per acre 

128, 130 acres in farms with improvements, 

census value 825,089 or 6.44 per acre 

Probable ratio of assessed to true value — 45.5% 
Approximate ratio taxes to true value — .55 of 1% 

RUSSELL COUNTY. 

Total Assessment Roll, 1912— $1,774,684 
State and County Tax Rate — (No report) per $100 

Approximate land area 210,560 acres 

Land assessed in tracts 159,052 acres 

Other lands 51 , 508 acres 

Percentage of land area in farms — 77% 
159,052 acres in tracts with improvements, 

assessed at $1,111,108 or $ 6.98 per acre 

161, 188 acres in farms with improvements, 

census value 1,801,855 or 11.17 per acre 

Probable ratio of assessed to true value — 62.5% 
Approximate ratio taxes to true value — (No report) 

SCOTT COUNTY. 

Total Assessment Roll, 1912— $10,016,577 
State and County Tax Rate — $1 . 15 per $100 

Approximate land area 184,960 acres 

Land assessed in tracts 177,414 acres 

Other lands 7 , 546 acres 

Percentage of land area in farms — 101% 
177,414 acres in tracts with improvements, 

assessed at $6,291,067 or $35.46 per acre 

186,438 acres in farms with improvements, 

census value „ 12,790,888 or 68.60 per acre 

Probable ratio of assessed to true value — 51.6% 
Approximate ratio taxes to true value — .59 of 1% 



246 REPORT OP THE SPECIAL TAX COMMISSION. 

SHELBY COUNTY. 

Total Assessment Roll, 1912— $12,435, 140 
State and County Tax Rate— $1.02 per $100 

Approximate land area 273,280 acres 

Land assessed in tracts 238,924 acres 

Other lands 34 , 356 acres 

Percentage of land area in farms — 87% 
238,924 acres in tracts with improvements, 

assessed at $8,459,512 or $35.40 per acre 

238,885 acres in farms with improvements, 

census value 15,960,694 or 66.82 per acre 

Probable ratio of assessed to true value — '53% 
Approximate ratio taxes to true value — -.54 of 1% 

SIMPSON COUNTY. 

Total Assessment Roll, 1912— $3,563,757 
State and County Tax Rate— $1.20 per $100 

Approximate land area _ 138,240 acres 

Land assessed in tracts 145,892 acres 

Other lands 

(Note: These figures are not reconcilable.) 
Percentage of land area in farms — -107% 
145,892 acres in tracts with improvements, 

assessed at $1,854,864 or $12.71 per acre 

148,341 acres in farms with improvements, 

census value 5,330,386 or 35.93 per acre 

Probable ratio of assessed to true value — 35.4% 
Approximate ratio taxes to true value — .43 of 1% 

SPENCER COUNTY. 

Total Assessment Roll, 1912— $2,754,929 
State and County Tax Rate— $1.20 per $100 

Approximate land area 119,040 acres 

Land assessed in tracts 116,420 acres 

Other lands 2 , 620 acres 

Percentage of land area in farms — 98% 
116,420 acres in tracts with improvements, 

assessed at $1,884,970 or $16.19 per acre 

116,385 acres in farms with improvements, 

census value 4,581,366 or 39.36 per acre 

Probable ratio of assessed to true value — 41% 
Approximate ratio taxes to true value — .49 of 1% 



REPORT OF THE SPECIAL TAX COMMISSION. 247 

TAYLOR COUNTY. 

Total Assessment Roll, 1912— $1,945,045 
State and County Tax Rate— $1 . 15 per $100 

Approximate land area - 178,560 acres 

Land assessed in tracts 167,783 acres 

Other lands 10, 777 acres 

Percentage of land area in farms — 89% 
167,783 acres in tracts with improvements, 

assessed at $ 985,357 or $ 5.87 per acre 

159, 171 acres in farms with improvements, 

census value 3,116 967 or 19.58 per acre 

Probable ratio of assessed to true value — 30% 
Approximate ratio taxes to true value — -.35 of 1% 

TODD COUNTY. | 

Total Assessment Roll, 1912— $3,922,040 
State and County Tax Rate— $1 .30 per $100 

Approximate land area 243,880 acres 

Land assessed in tracts 223,929 acres 

Other lands 19 , 951 acres 

Percentage of land area in farms — 96% 
223,929 acres in tracts with improvements, 

assessed at $2,521,638 or $11.26 per acre 

224,735 acres in farms with improvements, 

census value 5,593,257 or 24.90 per acre 

Probable ratio of assessed to true value — 45% 
Approximate ratio taxes to true value — .59 of 1% 

TRIGG COUNTY. 

Total Assessment Roll, 1912— $3, 142,473 
State and County Tax Rate — $1.20 per $100 

Approximate land area 273,920 acres 

Land assessed in tracts 253,115 acres 

Other lands 20 , 805 acres 

Percentage of land area in farms — 94% 
253, 115 acres in tracts with improvements, 

assessed at..— $2,110,351 or $ 8.34 per acre 

257,670 acres in farms with improvements, 

census value 2,974,735 or 11.55 per acre 

Probable ratio of assessed to true value — 72% 
Approximate ratio taxes to true value— .86 of 1% 



248 REPORT OP THE SPECIAL TAX COMMISSION. 

TRIMBLE COUNTY. 

Total Assessment Roll, 1912— $1,856, 114 
State and County Tax Rate— $1 .20 per $100 

Approximate land area 98,560 acres 

Land assessed in tracts 87,027 acres 

Other lands 11 , 533 acres 

Percentage of land area in farms — 93% 
87,027 acres in tracts with improvements, 

assessed at $1,379,550 or $15.85 per acre 

91,633 acres in farms with improvements, 

census value 2,571,262 or 28.06 per acre 

Probable ratio of assessed to true value — 56.5% 
Approximate ratio taxes to true value — -.68 of 1% 

UNION COUNTY. 

Total Assessment Roll, 1912— $9, 124,555 
State and County Tax Rate— $1.00 per $100 

Approximate land area 208,000 acres 

Land assessed in tracts 207,713 acres 

Other lands 287 acres 

Percentage of land area in farms — 97% 
207,713 acres in tracts with improvements, 

assessed at $5,351,997 or $25,77 per acre 

201,431 acres in farms with improvements, 

census value 10,777 , 322 or 53 .47 per acre 

Probable ratio of assessed to true value — 48% 
Approximate ratio taxes to true value — .48 of 1% 

WARREN COUNTY. 

Total Assessment Roll, 1912— $12,214,945 
State and County Tax Rate— $0.99^ per $100 

Approximate land area 339,200 acres 

Land assessed in tracts 324,670 acres 

Other lands 14, 530 acres 

Percentage of land area in farms — 95% 
324,670 acres in tracts with improvements, 

assessed at $6,065,047 or $18.68 per acre 

321,926 acres in farms with improvements, 

census value 10,915, 125 or 33.91 per acre 

Probable ratio of assessed to true value — 65% $ 
Approximate ratio taxes to true value — .55 of 1% 



REPORT OF THE SPECIAL TAX COMMISSION. 249 

WASHINGTON COUNTY. 

Total Assessment Roll, 1912— $4,865,270 
State and County Tax Rate— $1.20 per $100 

Approximate land area 191,360 acres 

Land assessed in tracts 177,864 acres 

Other lands 13 , 496 acres 

Percentage of land area in farms — 97% 
177,864 acres in tracts with improvements, 

assessed at $2,795,185 or $15.71 per acre 

185,848 acres in farms with improvements, 

census value 7,706,972 or 41.47 per acre 

Probable ratio of assessed to true value — 38% 
Approximate ratio taxes to true value — .46 of 1% 

WAYNE COUNTY. 

Total Assessment Roll, 1912— $4, 126,223 
State and County Tax Rate— $0.95 per $100 

Approximate land area 377,600 acres 

Land assessed in tracts 337,917 acres 

Other lands 39 , 683 acres 

Percentage of land area in farms — 84% 
337,917 acres in tracts with improvements, 

assessed at _ $2,230,718 or $ 6.60 per acre 

317,375 acres in farms with improvements, 

census value 3,563,277 or 11.23 per acre 

Probable ratio of assessed to true value — 59% 
Approximate ratio taxes to true value — .56 of 1% 

WEBSTER COUNTY. 

Total Assessment Roll, 1912— $4,466,540 
State and County Tax Rate— $1 .20 per $100 

Approximate land area 220,160 acres 

Land assessed in tracts 201,492 acres 

Other lands 18 , 668 acres 

Percentage of land area in farms — 93% 
201,492 acres in tracts with improvements, 

assessed at $2,121,388 or $10.52 per acre 

204,450 acres in farms with improvements, 

census value 6,334,062 or 30.98 per acre 

Probable ratio of assessed to true value — 34% 
Approximate ratio taxes to true value — .41 of 1% 



250 REPORT OF THE SPECIAL TAX COMMISSION. 

WHITLEY COUNTY. 

Total Assessment Roll, 1912— $5,967,73-4 
State and County Tax Rate— $1 . 15 per $100 

Approximate land area 374,400 acres 

Land assessed in tracts 340,324 acres 

Other lands 34 , 076 acres 

Percentage of land area in farms — 66% 
340,324 acres in tracts with improvements, 

assessed at $2,803,794 or $ 8.24 per acre 

248,287 acres in farms with improvements, 

census value 2,863,107 or 11.53 per acre 

Probable ratio of assessed to true value — 71 . 5% 
Approximate ratio taxes to true value — .82 of 1% 

WOLFE COUNTY. 

Total Assessment Roll, 1912— $1,409,067 
State and County Tax Rate— $0.90 per $100 

Approximate land area 147,200 acres 

Land assessed in tracts 143,382 acres 

Other lands 3,818 acres 

Percentage of land area in farms — 93% 
143 , 382 acres in tracts with improvements, 

assessed at $ 945,202 or $ 6.59 per acre 

137,508 acres in farms, with improvements, 

census value 1,460,716 or 10.62 per acre 

Probable ratio of assessed to true value — 62% 
Approximate ratio taxes to true value — .54 of 1% 

WOODFORD COUNTY. 

Total Assessment Roll, 1912— $10,553,284 
State and County Tax Rate— $0.99 per $100 

Approximate land area 124,800 acres 

Land assessed in tracts 119,078 acres 

Other lands 5, 722 acres 

Percentage of land area in farms — 97% 
119,078 acres in tracts with improvements, 

asiessed at $6,347,387 or $53.30 per acre 

121,320 acres in farms with improvements, 

census value 11,543,015 or 95.13 per acre 

Probable ratio of assessed to true value — 56% 
Approximate ratio taxes to true value — .55 of 1% 



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254 REPORT OF THE SPECIAL TAX COMMISSION. 

ESTIMATE OF DISTRICT ASSESSOR'S ALLOWANCE BASED 

ON ASSESSMENT OF 1911. 

Computed as Provided in Proposed New Article 11 § 22. 

District 1. Paid 1911 

Fulton $5,293,224 $899.10 

Hickman 4,733,683 778.12 

Carlisle 2,766,431 576.61 

Ballard 3,484,839 628.62 

Graves 10,904,249 1,277.73 

Marshall 3,213,121 624.33 

McCracken 13,740,599 1,765.68 

Total $44,136,146 $6,541.19 

Allowance at $400 per county and lj^c on $37,136,146=$7,442. 

District 2. Paid 1911 

Calloway $4,889,862 $846.68 

Trigg 3,208,904 636.41 

Christian 11,663,865 1,616.21 

Lyon 1,814,485 485.65 

Livingston 3,068,879 636.99 

Crittenden 3,252,831 755.19 

Caldwell 3,590,071 629.08 

Hopkins 7,473,091 1,099.65 

Total $38,961,988 $6,705.86 

Allowance at $400 per county and V/ 4 c on $30,96 1,988=$7,070. 

District 3. Paid 1911 

Union $9,308,363 $1,334.08 

Henderson 14,363,291 1,781.98 

Webster 4,565,179 778.93 

Total $28,246,833 $3,894.99 

Allowance at $400 per county and lj^c on $25,246,833=$4,355. 

District 4. Paid 1911 

Daviess $17,409,053 $2,277.20 

Ohio 5,544,787 853.15 

McLean 3,023,923 523.20 

Hancock 2,204,989 533.67 

Grayson 2,742,412 599.08 

Breckinridge 4,959,617 855.68 

Meade 3,172,793 638.65 

Hardin 6,297,404 946.05 

Total $45,264,978 $7,226.68 

Allowance at $400 per county and l^c on $37,264,978=$7,858. 



REPORT OF THE SPECIAL TAX COMMISSION. 255 

District 5. Paid 1911 

Simpson $3,591,640 $693.71 

Todd 4,326,754 743.46 

Logan 6,120,985 992.54 

Muhlenberg 4,605,014 133.09 

Allen 2,652,965 545.04 

Warren 21,721,118 2,393.60 

Butler 2,821,045 585.52 

Edmonson —.1,948,429 414.84 



Total $38,787,950 $6,501.80 

Allowance at $400 per county and 1*4 c on $30,787,950=$7,049. 

District 6. Paid 1911 

Earren $5,681,775 $893.22 

Hart 3,838,580 502.87 

Larue 3,340,293 718.79 

Nelson 7,452,091 1,169.12 

Bullitt 3,035,142 636.21 

Green 1,429,499 428.56 

Taylor 1,955,340 515.18 

Mlarion 5,324,290 176.74 

Washington 4,750,885 858.86 

Adair 2,898,557 625.65 

Russell 1,747,270 490.61 

Cumberland 1,965,840 499.80 

Monroe 2,590,893 563.31 

Metcalfe 1,833,759 482.43 

Casey 2,241,844 522.68 

Total $50,085,058 $9,294.01 

Allowance at $400 per county and l J 4c on $35,086,058=$10,385. 

District 7. Paid 1911 

Spencer $2,673,758 $555.21 

Shelby 12,449,900 1,795.04 

Anderson 3,232,462 642.25 

Oldham 4,203,118 790.66 

Trimble 1,953,453 498.21 

Henry 6,059,544 880.50 

Total $30,572,235 $5,161.87 

Allowance at $400 per county and V4c on $24,572,235=$5,472. 



256 REPORT OP THE SPECIAL TAX COMMISSION. 

District 8. Paid 1911 

Mercer $7,502,453 $1,206.02 

Boyle 8,809,229 1,367.54 

Lincoln 6,789,847 1,120.65 

Gsrrard 6,474,052 981.57 

Clark 11,658,820 1,389.62 

Powell -,_ 915.732 386.73 

Madison 12,7u8,895 1,822.65 

Jc ssamine 7,218,338 1,152.24 

Total $62,076,366 $9,427.52 

Allowance at $400 per county and lJ4c on $54,077,366=$9,960. 

District 9. Paid 1911 

Franklin $8,347,679 $1,275.28 

Woodford . 10,769,809 1,594.38 

Scott 10,479,411 1,479.42 

Bourbon 17,272,008 2,176.22 

Fayette 36,136,884 3,872.50 

Total $83,005,791 $10,397 80 

Allowance at $400 per county and 134c on $79,00S,791=$11,751. 

District 10. Paid 1911 

Boone 1 $7,595,564 $1,171.43 

Csrroll 3,330,956 654.15 

Gallatin 1,403,177 435.47 

Giant - 3,790,113 647.32 

Owen 3,617,310 683.64 

Kenton 33,118,714 3,672.93 

Campbell 25,834,608 2,936.56 

Total $78,690,442 $10,201.50 

Allowance of $400 per county and l^c on $72,690,442=$ 1 1,760. 

Dictrict 11. Paid 1911 

Pe.ndleton $3,829,580 ^>7il.37 

Harrison 8.743,140 1,221.39 

Nicholas 4,933,152 822.22 

Robertson 1,120,005 412.12 

Bracken 3,872,272 696.54 

Mason 10,682,263 1,501.82 

Fleming 6,427,150 1,034.60 

Total $39,607,562 $6,400.06 

Allowance at $400 per county and \%z on $32,607,562=$6,876. 



REPORT OF THE SPECIAL TAX COMMISSION. 257 

District 12. Paid 1911 

Greenup $2,650,075 $599.89 

Lewis 2,904,584 570.29 

Boyd 8,567,491 1,166.55 

Bath 5,076,799 820.13 

Montgomery 6,698,710 1,099.22 

Rowan 1,334,367 438.29 

Menefee 852,768 374.77 

Carter 2,457,706 562.15 

Elliott — 1,058,709 405.96 

Lawrence 3,005,884 628.13 

Morgan 2,708,777 594.12 

Total $37,315,870 $7,259 50 

Allowance at $400 per county and l^c on $26,315,870=$7,689. 

District 13. Paid 1911 

Breathitt - — $2,780,527 $109.08 

Lee 1,169,228 403.33 

Wolfe 1,472,501 457.89 

Estill . 1,495,116 444.31 

Johnson 3,021,161 636.24 

Martin _' 1 1,331,505 428.77 

Pike 5,582,732 892.41 

Knott 1,921,708 514.97 

Magoffin 1,535,049 389.94 

Floyd 3,235,600 665.64 

Leslie 2,039,124 516.25 

Letcher 2,529,947 428.50 

Owsley 973,677 416.29 

Perry 1,898,579 477.44 

Total ____$30,986,474 $6,781.06 

Allowance at $400 per county and l^c on $1 6,986, 544=$7,723. 

District 14. Paid 1911 

Jefferson $199,467,925i $37,473.28 

Allowance at $400 per county and l J Ac on $199,467,925=$25,208. 

District 15. Paid 1911 

Bell - $5,722,087 $803.84 

Harlan 3,940,109 706.12 

Jackson 1,591,648 463.03 

Laurel 2,843,911 1,157.27 

Clay 2,388,862 566,02 

Rockcastle 1,696,163 483.21 

Clinton 1,324,350 431.00 



258 REPORT OF THE SPECIAL TAX COMMISSION. 

Pulaski 5,889,089 953.69 

Wayne 4,188,972 761.19 

Knox 3,/84,614 698.84 

Whitley 5,849,617 919.95 

McCreary 



Total $39,219,422 $7,944.16 

McCreary County was not assessed separately from the three counties 
out of which it was cut, therefore the assessed value of that property is 
included in the property within Pulaski, Wayne and Whitley. 

Allowance at $400 per county and l^c on $28,219,322=$7,926. 

Total assessed value of all districts $846,427,020. Paid 1911, $141,211.28. 

Allowance at $400 per county and l^c on $727,427,020=$138,525. 



AN ACT 

PROVIDING FOR A TAX ON SECURITIES IN LIEU OF 

ALL OTHER TAXES. 

§ 1. Mortgages, secured debts and stock of foreign corpora- 
tions to be a class — Mortgages, secured debts and certain shares 
of stock, all as denned and described in section two of this article, 
except those described in section three of this article, are hereby 
declared to constitute a class of property within the meaning of 
section one hundred and seventy-one of the Constitution of Ken- 
tucky as the same was amended in November, 1913. This class 
shall, for convenience of reference in this article, be called "securi- 
ties." All other classes of property than securities shall be the 
classes of property subject to State and to local taxation as pro- 
vided in said section of the Constitution. It shall be optional with 
the owner or holder of any such securities to pay on them the 
State lieu tax provided for in this article, which if paid shall be 
in lieu of all other taxes, State and local, or to list the securities 
with the assessor as other property is listed for purposes of taxa- 
tion. 

§ 2. Securities defined — The term securities as used in this 
article shall include : 

(1) Every debt secured by mortgage, or secured by a deed of 
trust, or which is a lien on real estate, whether such mortgage be 
recorded in this State or elsewhere. 

(2) Every debt represented by a bond, note or other debenture 
forming a part of a series of similar bonds, notes or debentures 
secured by a mortgage of real estate or personal property, or both 
whether such mortgage be recorded in this State or elsewhere. 

(3) Every debt represented by a bond, note or other debenture, 
forming part of a series of similar bonds, notes or debentures, 
secured by the deposit of any valuable securities as collateral, 
under a deed of trust or collateral agreement held by a trustee. 

(4) Every debt represented by a bond, note or other debenture, 
forming part of a series of similar bonds, notes or debentures, 
which by their terms are payable more than one year from the 



260 REPORT OF THE SPECIAL TAX COMMISSION. 

date of their issue, the payment of which is not secured by mort- 
gages or by the deposit or pledge of any collateral security. 

(5) The shares of stock in any corporation which does not re- 
port and pay taxes upon its property in this State, including its 
special and corporate franchises, whether such corporation be or- 
ganized under the laws of this State or country. 

§ 3. Securities excepted — -The tax provided for in this article 
shall not apply to the following classes of secured debts and stocks : 

(1) The bonds of Kentucky and of the counties, municipali- 
ties, taxing and school districts therein excepted by the Constitu- 
tion o'f this State. 

(2) Any mortgages, secured debts or shares of stock belong- 
ing to any bank or trust company taxed in this State, but not any 
securities held by them in trust or as collateral for loans. 

(3) The shares of stock in banks and trust companies reported 
to and assessed by the State Tax Commission. 

(4) Mortgages given by corporations and stocks, bonds, notes 
or debentures held as collateral when either are the security for 
a series of taxable bonds, notes or debentures, when the taxation 
thereof and of the bonds, notes or debentures secured thereby 
would constitute double taxation. 

§ 4. The tax rate — The State lieu tax shall be at the rate ot 
forty cents per annum on each one hundred dollars of the amount 
of the debt secured, taken at par, or of the fair cash value of the 
shares of stock, and may be paid annually or foi as many years 
in advance as the owner or holder of the security shall elect. 

§ 5. Tax— How paid— Any person may take or send to the 
office of the Auditor of Public Accounts any security upon which 
he desires to pay the State lieu tax, or he may send a description 
of the same, and may, at the same time, tender to the State Treas- 
urer the amount of the lieu tax on such security for the period 
for which he may elect to pay the tax. 

If the securities be shares of stock, he shall accompany the 
certificates or the description of the stock with an affidavit veri- 
fied by himself, by a reputable banker, or by a responsible officer 
of the corporation issuing the stock, setting forth the fair cash 
value of the stock. If the stock be listed and has been quoted on 
any stock exchange as often as once a month during the preceding 
twelve months, the affidavit shall set forth that fact and shall set 



REPORT OF THE SPECIAL TAX COMMISSION. 261 

forth the highest and lowest prices at which the stock was sold 
during the twelve months and the last selling price, or if no trans- 
fers have taken place, it may set forth the highest and lowest price 
bid and the highest and lowest price asked. The affidavit must 
also set 'forth the name, residence and postoffice address of the 
owner of the security. These affidavits shall be laid before the 
State Tax Commission, who shall immediately fix and determine 
the fair cash value of the shares of stock and certify it to the 
Auditor. 

When any mortgage is for an indefinite amount, so that the 
principal of the debt secured thereby cannot be determined from 
the terms of the mortgage, or if the mortgage be given to secure 
the performance by the mortgagor, or any other person of a con- 
tract obligation, other than the payment of a specified sum of 
money and the maximum amount secured, or which by any con- 
tingency may be secured by the mortgage, is not expressed 
therein, such mortgage shall be taxable upon the value of the 
property covered by the mortgage, which shall be determined by 
the State Tax Commission on the basis of affidavits in such form 
and of such content as the Commission shall prescribe or 'from 
other sources of information. 

When the Auditor of Public Accounts has ascertained that the 
amount of the tender is the correct amount of the lieu tax to be 
paid, he shall direct the Treasurer to accept the same and shall, 
as soon as the tax be covered into the State Treasury, make an 
indorsement upon the security, or shall give a receipt for the tax 
thereon, describing the security and setting forth the amount of 
the lieu tax paid, the period for which it has been paid, and the 
fact that this tax is in lieu of all other taxes, State and local, in 
Kentucky. No security so endorsed, or accompanied by a receipt 
setting forth the payment of the State lieu tax, shall be assessed 
in Kentucky by a tax commissioner during the period for which 
the tax has been paid. Securities upon which the lieu tax has not 
been paid shall be listed with and assessed by the district or 
county. 

§ 6. Adhesive stamps — Adhesive stamps shall be prepared by 
the Auditor of Public Accounts in such form, or design, and of 
such denomination and in such quantities as he may determine, 
which may be used to receipt for lieu taxes. Upon the payment 



262 REPORT OF THE SPECIAL TAX COMMISSION. 

of the tax on any security, the Auditor of Public Accounts shall 
affix stamps of the proper denominations and equal in face value 
to the amount of the tax paid, to the security or to the receipt for 
the tax, and shall cancel the stamps by the seal of his office or by 
such other device as he may prescribe. 

§ 7. Record of securities — The Auditor of Public Accounts 
shall keep a record of all securities upon which the lieu tax is paid, 
by whom paid, together with the names, residences and postoffice 
addresses of all the owners. This record shall at all times be open 
to the inspection and use of the State Tax Commission. 

§ 8. Branch offices — The Auditor of Public Accounts may, if 
he deem it necessary for the convenience of taxpayers, make the 
sheriff of any county in which there is a city of the first or second 
class, his deputy for the collection of the lieu tax on securities, 
other than shares of stock, and may give into custody of such 
sheriff stamps and cancelling devices, and in that event the sheriff 
is authorized to receive the taxes tendered and shall remit them 
not less frequently than once a month to the State Treasury. He 
shall, however, not receive any taxes on shares of stock. The 
sheriff ishall also send in to the Auditor at least once every month 
all the records of the securities upon which the taxes have been 
paid. The Auditor of Public Accounts shall fix the compensation 
of the sheriff for these services, which shall, in no case, exceed 
two and one-half per cent, of taxes collected, nor more than four 
hundred dollars per annum to any one sheriff. 

§ 9. Illegal use of stamps — Penalty — Any person who shall 
wilfully remove or cause to be removed, alter or cause to be al- 
tered the cancelling or defacing marks of any adhesive stamp pro- 
vided for by this article with intent to use the same or to cause 
the use of the same after it shall have been used, or shall know- 
ingly or wilfully sell or buy any washed or restored stamp, or 
offer the same for sale, or give or expose the same to any person 
for use, or knowingly use the same or prepare the same with the 
intent for the further use thereof; or shall wilfully use any coun- 
terfeit stamp or any forged stamp with intent to defraud the Com- 
monwealth of Kentucky, shall be guilty of a misdemeanor, and on 
conviction thereof shall be liable to a fine of not less than five 
hundred nor more than one thousand dollars, or be imprisoned for 



REPORT OF THE SPECIAL TAX COMMISSION. 263 

not more than six months, or by both such fine and imprisonment, 
at the discretion of the court or jury. 

§ 10. Tax Commission to act — The State Tax Commission 
shall, through its deputies, make every effort to bring this lieu tax 
to the attention of the taxpayers and especially to the owners oi 
any mortgages of record and shall use every means in its power 
to find out and assess any securities upon which the lieu tax is not 
paid. 



THE USE OF STANDARDS IN REAL ESTATE ASSESS- 
MENT*. 

By A. C. Pi,i£YDEi,iv. 

Secretary, New York Tax Reform Association. Corresponding 
Secretary, International Tax Association. 

An accurate assessment of real estate requires the listing of 
all property in the district at its proper value. The Law in Ohio 
provides that the assessor shall be supplied with maps giving the 
dimensions of the different parcels of real estate in his district. 
Assuming that the assessor is properly equipped with maps and 
other records, this address will deal only with methods of valua- 
tion. 

A fair valuation of real estate for taxation requires judgment 
and system. No rules can be laid down that will dispense with 
the need for the exercise of judgment by the assessor. Nor can 
a fair assessment be made without the use of some rules, how- 
ever crude, for testing and correcting the variations of judgment 
that cannot be avoided in dealing with a quantity of properties. 

A basis for valuation. 

The first problem that confronts the assessor is to find a basis, 
for valuation. 

The value of real estate and especially of land is always a mat- 
ter of opinion. The price that can be obtained for a parcel of real 
property is determined by the individual judgment of the buyer 
as to its present actual or possible earning power, or its future 
earning capacity. 

Prices actually received are a guide to value but are not con- 
clusive. The law does not contemplate, nor does justice require, 
the assessment of any piece of real estate at a value based on un- 
usual conditions. One lot may be sold very cheap because of an 
immediate necessity; a similar lot adjoining may bring a high 
price because of a special desire for it; yet the actual market value 



•An address before the Sixteenth Annual Meeting of the Ohio State Board of 
Commerce; Columbus, November 10, 1909. 



REPORT OF THE SPECIAL TAX COMMISSION. 265 

might be exactly the same, as would be seen if both the new 
owners sold their lots under ordinary conditions. 

The assessor cannot take notice of all the differences of opinion, 
but must decide for himself upon the ordinary, normal vaiue ui 
any given piece of property. It is important, in order to secure 
equality between the different taxpayers, that this same test of 
ordinary or normal value shall be applied in the assessment of all 
the real estate with which he has to deal. 

In this determination of what might be termed a general 
standard, amid the varying fluctuations of the market, a proper 
system will help the assessor in the application of his judgment 
of values. 

In assessing many parcels of property it is impracticable and 
unnecessary to pass individual judgment upon each one, based 
upon the testimony of prospective buyers and sellers. If this 
could be done, the resulting assessment would be more uneven 
than one made under a fairly good system, without actually view- 
ing any of the property. 

When from his general knowledge, or as the result of inquiry 
and examination of records, the assessor is reasonably satisfied of 
the actual value of a certain number of parcels of real estate in his 
district, how can he best use that information in valuing the rest 
of the property, concerning which he has no exact knowledge? 
And how can he reconcile and average the valuations concerning 
which he has information? This work can be simplified a great 
deal by keeping in mind a few general principles and following 
some simple rules. 

Assessment of land. 

Real estate consists of two elements that must be considered 
separately in valuation to secure a correct assessment; land, and 
the improvements on the land. 

This is recognized by the Ohio law, which provides separate 
columns on the assessment list for the statement of the valuation 
of each of these elements, and also for their aggregate sum. 

The land must be considered first, as it is fundamental and 
extends throughout the assessment area, which may contain a 
great deal of unimproved property. 



266 REPORT OF THE SPECIAL TAX COMMISSION. 

The value of a parcel of land in cities is determined by its loca- 
tion, its area, and its nearness to the grade level of the street. 
The selling price of any one plot of land at a particular time de- 
pends partly upon the judgment of the buyer; its general market 
value is fixed by the collective opinions of the many individuals 
who make up the market for that particular parcel of land, or simi- 
lar land in the neighborhood. As the present or possible earning 
power will be the principal factor governing the opinions of these 
various individuals, it may be said that, generally speaking, the 
earning power (actual or possible), or what the economists call 
the net rent, governs the selling value of land. This is, however, 
not in all cases conclusive. 

Any competent builder can go to a strange city and make off- 
hand a fairly close estimate of the value of any building. But 
no one can tell the value of land in a strange city without con- 
sulting residents and property owners. Even then he will find 
differences of opinion. 

It is because the value of land is so much a matter of opinion, 
that it is necessary for the assessor, first, to ascertain the opinions 
of as many competent judges of values as possible, then to tabu- 
late this and other information in such way as to secure some 
uniformity. By following a few simple rules, an assessment can 
be made that will be fair as between property owners. 

The Tax Department of the City of New York has to assess 
annually real estate valued at more than six billion dollars, of 
which three billion, eight hundred million dollars is land value; 
and must deal with buildings worth millions of dollars each, 
standing on land' valued as high as $20,000 a front foot, or from 
fifteen to twenty million dollars an acre. In order to do this work 
thoroughly and equitably a system has been built up gradually 
that is probably the most complete in use. 

"Unit" front foot values. 

The method employed in the city of New York for a number 
of years and more recently developed by the publication of its 
land value maps, can be adapted for use anywhere. 

The essential feature of this plan is to ascertain the front foot 
value for lots of normal depth in each city block, far enough from 
the intersecting streets not to be influenced by corner values. 



REPORT OF THE SPECIAL TAX COMMISSION. 267 

These "unit" or front foot values are determined by the answer 
to this question: "What is an ordinary sized lot in the middle of 
this block worth?" In the old city of New York the great ma- 
jority of lots are 100 feet deep and the normal width is 25 feet; 
in many parts of Brooklyn 20-foot lots are the usual size. 

In making their assessments, the assessors put down on their 
field maps the "unit" front foot value for each block, which they 
have decided to be the fair value for a regular lot 100 feet deep. 
This unit is used in calculating the land value of the lots along 
that block frontage. Allowance is made for grading in the case 
of vacant lots not at the street level. Corner lots are increased 
on the basis of rules that have been worked out in some detail, 
allowance being made for any difference in the unit values along 
the two streets on which the corner lot fronts. 

Irregular lots. 

The value of lots less than 100 feet deep is determined usually 
in accordance with a scale called the Hoffman Rule, as modified 
by the department. This scale, laid down by Judge Hoffman 
years ago, is based on the theory that a lot 50 feet deep is worth 
two-thirds as much as it would be if it were 100 feet deep; and 
other dimensions in proportion. In other words, that the value 
of a lot of normal width, especially in the city, depends largely 
upon its frontage. This proportion may not apply to small towns, 
but some rule can be established by every assessor for his own 
guidance. 

This year the Tax Department has published maps covering 
the entire city, on which are shown these unit values of street 
frontage for every block in the city. The public can now inspect 
these maps and criticize the work of the assessors. Anyone 
familiar with the value of property at a certain location can see 
whether the assessment coincides with his view; or, if he finds 
the value correct in a location with which he is familiar, can readily 
compare surrounding property. 

Using the map system. 

From the assessor's standpoint, the greatest value of this 
method of setting down the so-called unit values, is that it will 
enable him to keep his assessment regular. For example, as a 
general rule, the value of land in a small town will decrease as 



268 REPORT OF THE SPECIAL TAX COMMISSION. 

the distance from the railroad station or business center increases, 
and in a city will go down between business districts. 

The assessor before making up his map, will ascertain by due 
inquiry the prevalent opinion of the value of land in certain 
blocks in his district, as shown by sales or otherwise. Then he 
can put down on his map the front foot value upon which he de- 
termines as being the normal value for each block. If he has no 
information regarding some blocks he may be able to strike an 
average from surrounding property. 

Looking at the completed map he will find usually that these 
unit values become smaller and smaller, along a street leading 
away from the center of town, or from a business thoroughfare. 
If after decreasing regularly for several blocks, there is a sudden 
increase and then a still more sudden drop, it is obvious either 
that there are exceptional conditions in that block or that there 
is something wrong with the assessment. The assessor is put on 
notice, and has the chance to investigate and perhaps correct the 
assessment, instead of leaving an over-valuation that will be un- 
just and may result in appeals and litigation. 

In the same way, a sudden drop in value, below the values in 
either direction, may need investigation. In the case of vacant 
suburban land, it may be that the land is not at grade in that block, 
and the value is reduced because of the cost of grading. 

Where, as in New York, most lots are 100 feet deep, it is best 
to determine on the unit value for that depth, even though all the 
lots on the block may be somewhat shorter or longer; so that in 
reading along a street the figures will be comparable. 

However, in a town where there is considerable variation and 
in one block the lots will be 100 feet and in another block 150, it 
may be advisable to take the usual depth of each block and mark 
the map with a unit value based on that depth and then enter under 
it the depth, just as in writing a fraction. 

When these unit values are determined on, it is then merely a 
matter of arithmetic to fix the value of the land for each regular 
inside lot, by multiplying the frontage of that lot by the "unit" 
or one foot front value. Allowance must be made for lots of ir- 
regular shape, or varying depths. Corner lots and sometimes 
those near a corner must have something added for the corner 
value, but so much depends on local conditions that no positive 
rule can be laid down for ascertaining this additional value. 



REPORT OF THE SPECIAL TAX COMMISSION. 269 

Assessment of buildings. 

Having settled the question of the proper assessment for the 
land valuation, there still remains the problem of valuing the build- 
ing. 

In the City of New York the law does not require a separate 
statement of building value, but only of the land value and the 
total value. From the assessment roll it is easy to calculate that 
the value of the building is the difference between these two sums. 

As a matter of fact, that is exactly the way in which the value 
of the building always can be determined. A building is never 
worth more than the difference between what the parcel of real 
estate will sell for with the building on it and what it would sell 
for if it were a vacant lot. 

In the case of new buildings, this difference will be practically 
the cost of reproducing the building. .In the case of old buildings, 
or those which are not adapted to the site, the difference may be 
very small or none at all. 

Everyone knows that there are buildings that it would be ex- 
pensive to replace and which do not add enough to the value of the 
land on which they stand to pay for what it would cost to remove 
them. 

However, in assessing a building and lot it is not always prac- 
ticable to determine exactly what the combination will bring in 
the market, any more than it can always be ascertained accurately 
just what a piece of vacant land will bring. Therefore, it becomes 
advisable to adopt some rules which will result in an equitable as- 
sessment of building values so that when they are added to the 
land value the total assessment will be a just one. 

Here again, a system of unit values can be employed, based on 
the relative value of different classes of buildings. This method 
also has been followed in New York. Buildings of the same class 
generally are about the same height between floors, and therefore 
the New York Tax Department has adopted a "square foot" unit 
system, which is simpler than the cubic foot method used by con- 
tractors. The plan is this : A certain kind of store building is 
known to cost $5 a square foot of floor space. The square foot 
of ground floor is measured, multiplied by the number of stories, 
and this in turn is multiplied by five. The result is the building 
value. A different unit, say $4, would be used for store property 



270 REPORT OF THE SPECIAL TAX COMMISSION. 

of an older construction, and other kinds of property are classed 
at rates that vary according to the general value, in each case, of 
that kind of building. 

This plan can be adapted to suit local conditions and under 
it a proper allowance can be made for old-fashioned buildings or 
for residences which may have become less desirable because of 
a change in the character of the neighborhood. 

In a small town, it may be easier to divide residences into 
classes, according to their types, especially the cheaper houses, 
which are fairly uniform in cost for any certain size or number of 
rooms. In some cities where there is a great variation in styles oi 
houses, it may not be practicable to fix units for some residence 
property. But the plan can always be used for business buildings, 
factories and warehouses. 

It must be remembered, however, that an assessment of a 
building and lot made by adding the value of the land to the value 
of a building, as calculated by any fixed rule, may not represent 
the actual selling value. Assessments so made should always be 
checked up, by considering the known selling value of similar 
property. If the total assessment is too low, the land value unit 
has been made too low, and the surrounding units should be gone 
over and corrected. If the total assesisment is too high, it will 
be usually because in that case the building is not suited to the 
site, and the total assessment should be reduced accordingly. 

The distinction must always be kept in mind that land values 
in cities or towns is location value and will be fairly uniform in 
any neighborhood, while the building value depends very much 
on the. circumstances in each case. 

Suburban property. 

Real estate in suburban districts or smaller towns can be as- 
sessed by rules similar to those outlined for city real estate as- 
sessment. The only feature that may occasion some difficulty is 
where a residence is surrounded by quite extensive grounds. Here 
there may be a value, which is not really a land value, due to such 
improvements of the lot by gardening, etc., as make it desirable 
for residence purposes, and which is not strictly a building value. 
However, such cases are rare. In the ordinary case of a house on 
a small lot in the suburbs, the land should be assessed just the 



REPORT OF THE SPECIAL TAX COMMISSION. 271 

same as a vacant lot, which is at grade, and any additional value 
due to terracing or grading the lawn should be treated as a part 
of the building. Such improvements add no more to the value of 
the land than does the digging of the cellar; and both cellar and 
terracing might be entirely worthless to a man who wished to put 
up another kind of a building on that spot. 

Farm property. 

To assess real estate in the country districts, some modification 
of the rules above set down is necessary, but the same principles 
can be allowed. 

Instead of determining a front foot value, an assessor should 
decide on acreage values, taking into consideration the average 
character and location of the land. 

These values should be classified according to the character of 
the district. In some cases these classes will be found useful : 
good farming land, medium land, poor land, swamp land, hillside 
sloping land, wild brush land. Find the values for each in the 
best location, that is, nearest to town; and if necessary make 
another set of values for more distant land. Good farm land at 
a distance from a railroad may not be worth as much as medium 
land near the station. 

If need be the assessor in viewing property can outline roughly 
the area of any farm that comprises several kinds of land, and the 
acreage of each. Then in making up the map the value of each 
class can be entered; as, 30 acres, good, $40; 10 acres, swamp, 
$10; total land valuation, $1,300. 

By deciding from the best information possible the value of 
farm land in different parts of his assessing district, and writing 
those figures in on the map, it will not be difficult to motice 
whether a proper allowance is made in these values for the dis- 
tance from a town or railroad station, or for some sharp change in 
the general character of the district. 

In dealing with farm buildings the assessor can adopt a unit 
for barns or sheds of different types, which will vary perhaps from 
20 cents to $2 a square foot. Then by measuring the building, if 
only by "stepping it off" he can feel that he is treating all owners 
of the 'same class of property alike. 



272 REPORT OF THE SPECIAL TAX COMMISSION. 

The need of standards. 

The essential thing is to establish some sort of standard so 
that the varying judgment not merely of the assessor, but of those 
upon whom he must necessarily rely, can be checked and brought 
into harmony. 

Take any dozen men and their opinions as to the value of a 
given piece of property will differ. The opinion of one man as to 
the relative values of different pieces of property will differ very 
often, according to a state of mind or climatic conditions. On a 
bright spring day almost anyone will have a higher opinion of the 
value of a piece of real estate than if he were looking at it through 
a November fog. 

These variations might result in serious injustice if the owner 
of a rather poor piece of property were assessed on a bright day 
and his neighbor, with better property, were assessed on a foggy 
day, and as a result both were assessed at the same amount. If 
the conditions of the weather were reversed the injustice might 
be the other way and the poor property be taxed way below its 
value, and the better property be taxed far more than it was really 
worth. 

It is the duty of the assessor to make all the allowances he 
can for these differences of condition, and of opinion. In this work 
the establishment of standards, and the entering of unit land values 
upon the assessment maps will be of great assistance. Without 
such helps it is impossible for any assessor, no matter how wel- 
intentioned he may be, to keep the assessed values of real estate 
equitable. 



TAX MAPS. 

I By Edward L. Hsydecker, 

Assistant Tax Commissioner, City of New York. 

Whenever the subject of assessment of real estate for purposes 
of taxation is considered, whether it be in addresses on the sub- 
ject or in reports of tax commissioners, or in conventions called for 
the purpose, it will be found that by far the greater part of the 
discussion is directed to the review of assessments, after they have 
been made by the local assessor. The work of the local assessor 
is little considered, and if considered at all, usually comes in for 
denunciation, rather than for praise. The thought of improving 
the tools of the assessor, of providing him with better means and 
instruments for doing his work, rarely gets any consideration. 

We have built from the top down. We should reverse this 
process and build from the bottom up. It is all right to provide 
for publicity of the work of assessment and to afford every means 
to correct errors and safeguard the taxpayers against inequality, 
but it is of even greater importance to provide the assessor with 
the means of doing his work accurately in the first place. 

Primarily, the tools of an assessor are his map, his field book 
and his assessment roll. He needs all three and most of all he 
needs a map. He can provide himself with a field book and an 
assessment roll, but only in exceptional cases can he prepare his 
own map. Yet, without the map, his field book, even if it be kept 
most diligently must be largely meaningless, and his assessment 
roll will show on many pages the omissions and inaccuracies which 
can be guarded against only by a map. But, in the State of New 
York, we have tax maps in only a few of the larger cities and in 
a few of the progressive villages. 

By Chapter 315 of the Laws of 1911 we have changed the form 
■of our assessment roll and have introduced changes in the methods 
of assessment which make it all the more important to have & 
proper tax map. Heretofore the assessment has been against th* 
owner of the land; from 'now on it is to be against the land itself. 
The old distinction hetyf^en resident and non-resident owners is 



274 REPORT OF THE SPECIAL TAX COMMISSION. 

gone. The name of the owner hereafter forms no part of the roll 
and is to be continued and used merely as an aid to identify the 
parcel assessed, so that the need of an accurate description of the 
land is now a matter of importance and to get an accurate descrip- 
tion we must have a map. 

No one will deny the great advantage of a tax map. It is self- 
evident. But the cost of tax maps has always been urged against 
any proposal to provide them. This idea of large cost, however, 
arises because the only map which has been considered has been 
a map based on an accurate and elaborate survey made by some 
competent surveyor. Necessarily, such a map is expensive. But 
can we not obtain a serviceable tax map that will not be expensive? 
This paper is an answer to that question. 

Let us consider tax maps in two parts. First, for towns out- 
side of villages; and second, for cities and villages. 

Town tax maps. 

The United States Geological Survey has nearly completed a 
topographical survey of the State of New York. The maps of this 
survey are printed on sheets 16^x20 inches, each showing a rec- 
tangular area 15 minutes of longitude by 15 minutes of latitude. 
These maps are drawn to a scale of one inch tO' the mile and show 
all streams, lakes, marshes and water courses, and all roads, rail- 
roads, cities, towns and villages. Two hundred and eleven sheets 
have been printed for the State of New York and forty-five sheets 
are still to be issued. So that we have more than four-fifths of 
the State accurately mapped on a scale of one mile to the inch. 
These maps, in addition to showing water courses, marshes, high- 
ways and railroads, also contain contour lines, showing the eleva- 
tion of the surface above sea level. 

If we can eliminate the contour lines and enlarge the scale of 
the map to a proper size, we shall have an excellent map as a basis 
for a tax map. It is a simple task for a draughtsman to make 
from these topographical maps a tracing of the whole area of a 
town, showing on such tracing the highways, railroads, cities and 
villages, and also showing the streams, marshes, water courses, 
lakes and ponds. This will give us the map without the contour 
lines, which tend to confuse the eye and are not needed on a tax 
map. 



REPORT OF THE SPECIAL TAX COMMISSION. 275 

It is an equally easy task to make a photographic enlargement 
of this tracing of a size that will give six inches to the mile, that 
is to say, 880 feet to one inch. On such a scale a very satisfactory 
tax map of a rural district can be drawn. If such a scale is found 
to be too small, the enlargement may be increased, until the proper 
scale is produced. 

From this photographic enlargement on the scale of >six inches 
to the mile the draughtsman may now make new tracings on 
sheets of some standard size, for example, twelve inches by 
eighteen inches, to cover the entire area of the town. And from 
these tracings, prints can be produced in any number desired. 

We will then have a series of sheets 12x18 inches, showing the 
entire area of the town, on the scale of six inches to the mile, or 880 
feet to one inch, on which we will have located with an accuracy suf- 
ficient for our purpose, all highways, all railroads, and cities ana 
villages, all water courses, marshes, streams, lakes and ponds. Iri 
other words, we will have a basic land map of the town, ready 
for the drawing in of the boundary lines of each farm, or lot, which 
is separately owned and separately assessed. 

These topographical maps also show every building on the 
land, and if these buildings are reproduced in the tracings, en- 
largements and prints, we shall have each group of farm buildings 
located on our basic land map. 

Now suppose that each board of assessors is furnished with a 
sufficient number of sheets of this land map of their town. The 
task before them is to draw in pencil upon such map the boundary 
lines of each farm, or lot, as they understand such boundaries to 
be, and enter on each separately assessed farm, or lot, on such 
map, the name of the owner of the farm, or lot, and the number 
of acres supposed to be contained therein. This is not a difficult 
task, for, bear in mind, the map will show each highway with all 
its bends and turns, each stream with its bends and turns, each 
bridge across a stream, each lake or pond, or marsh, each group 
of farm buildings, each separate house along the highway, and each 
city or village in the vicinity. The only thing needed is to draw 
in the farm boundaries according to their best judgment. 

Next let the assessors make several copies of the map as drawn 
by them and hang them up for public inspection in several places 
in their town and invite criticism of their draughtsmanship on the 



276 REPORT OF THE SPECIAL TAX COMMISSION. 

boundary lines from their neighbors and the taxpayers. After a 
sufficient interval, let the assessors appoint a time for hearing 
protests and corrections. Let it be announced that those who 
protest against the accuracy of the map and claim that the parcels 
owned by them are too large, as shown on the map, or are inac- 
curate as to shape or location, or for any other reason, will be ex- 
pected to produce their deeds or surveys to assist the assessors 
in correcting the map. As a result of such protests, the assessors 
can correct their maps and again hang them up for inspection, in 
this way, it will not be long before they have a tax map which will 
be accepted as fairly accurate by the taxpayers of the town. 

The next step towards accuracy in the tax map is to measure 
the frontage on the highway of each separately assessed farm, or 
lot. In the whole State of New York, outside of the cities and 
villages, there are 75,000 or 80,000 miles of highway. We have 
933 towns, so that each town contains on the average 75 or 80 
miles of highway. 

Two men with a tape line can easily measure four miles a day, 
so that inside of one month the entire frontage of all the land 
abutting on the highways within a town, outside the villages, can 
be measured and entered on the map. This will leave only the 
interior boundary lines to be accurately determined. The cost 
of such frontage measurement should not exceed $150 for each 
town and in most eases would be less. 

To locate accurately the interior boundary lines between the 
farms may require a survey, but that is by no means the only 
way. As the map progresses toward accuracy the interest of each 
land owner to have his farm, or lot, accurately plotted on the map 
will increase proportionately. For only by having it accurately 
plotted and having his neighbors' farms accurately plotted, can 
he be certain that both he and they are paying taxes in a fair 
and equitable proportion. I believe that the request by the board 
of assessors to each land owner to produce his deed or survey for 
their inspection to assist them in getting his boundaries accurately 
plotted on the map will be met by the prompt production of the 
deed or survey and by all the assistance that the owner can give 
the assessor. Many owners have among their title papers maps 
of their property which, of course, if produced for the inspection 



REPORT OP THE SPECIAL TAX COMMISSION. 277 

of the assessors, would be a great help in an accurate plotting of 
farm boundaries. 

Finally, when such map has been prepared as indicated, the 
assessors should forward to the State Board of Tax Commissioners 
as clear and accurate a copy as they can make. The State board, 
through its draughtsman, may then prepare a carefully drawn 
map, showing all buildings, boundaries and frontage of each farm 
and lot with the owner's name and supposed area. The State 
board may then number each separate parcel in some convenient 
order and certify the map to the assessors. Thereafter the assessor 
can describe each farm, or lot, by its number on the map in their 
assessment rolls. When a farm or lot is subdivided, on the produc- 
tion of the deed to the assessors they can subdivide the farm on the 
map and give a new number to the part that is cut off from the 
original farm or lot. 

Cost of such tax maps. 

The area of the State of New York is 49,170 square miles. We 
have 933 towns. This gives an area of 50 square miles to each 
town, after deducting the area in cities and villages. Six square 
miles can be shown on a sheet 12x18 inches, on a scale of 6 inches 
to the mile. But many of the towns are of irregular shape. Let 
us assume ten sheets required for each town, or 9,330 sheets for all 
the towns. Add 933 sheets, or one for each town, on the original 
scale of one inch to the mile, and we have a total of 10,363 sheets. 
Assuming that one draughtsman can complete three sheets a day, 
we find that twelve draughtsmen could produce all these sheets 
within one year. Making a proper estimate for the salaries of the 
drafting force, for materials, for photographic enlargements and 
prints, it is fair to assume, that $25,000 would enable the State 
board to furnish the original basic land maps to each board of 
assessors. If the State cannot pay this and if we put the charge 
upon the town, it would cost each town $25 for such land maps. 
Additional copies could be easily furnished in any quantity re- 
quired for one or two cents a sheet. 

City and village tax maps. 

Cities and villages present conditions totally different from 
the rural conditions in the town. Values are enormously greater 



278 REPORT -OF THE SPECIAL TAX COMMISSION. 

in urban communities. Feet and even inches count and may be 
measured by hundreds or thousands of dollars in value. Accuracy 
is needed in urban maps and every city and village should be 
required by law to provide an accurate map of its entire area 
made by a competent surveyor from an actual survey for the use 
of its assessors. If a city or village has not such a map it is treat- 
ing its taxpayers unfairly and the burden of taxation is not evenly 
distributed. The change in the form of the assessment roll ap- 
plies to cities and villages as well as to towns. Assessment here- 
after will be against the land and in all the cities hereafter the 
value of the land without building value is to be separately stated 
on the roll and also the total of land and buildings ; so that the 
necessity for a land map is even greater in the cities than in the 
towns. Many villages have maps. Chapter 315 of the Laws oi 
1911 permits the assessors of any town to adopt the map of the 
village, when approved by the State board, as the official map of 
the land within the village and describe such land on their rolls 
by reference to the numbers on such map, as soon as such map 
is approved by the State board. These maps should be presented 
to the State board for approval and adoption. 

Mr. E. L. Heydecker (continuing) : I have with me the 211 
sheets that have been issued for the State of New York, and 1 
have endeavored to index them so that after adjournment if any 
of you wish to see the map of any particular part of the State 
you are interested in I think I can pull out the sheet and show 
it to you. This map, for instance, is printed in three colors. The 
brown lines are contour lines, showing elevation; the blue lines 
are water courses, streams, lakes, etc. ; the black lines are the 
roads, railroads, cities and villages — as stated on the back — "works 
of man." 

In the center of this map I have in my hand is the town of 
Eaton. Here is a tracing of the town of Eaton. That shows every- 
thing contained on the map except the contour lines — shows the 
roads, railroads, bridges, villages, etc. 

This is a photographic enlargement of this tracing, exactly six 
times that tracing. If you put your measuring line on that margin 
you will find it is exactly six times that tracing. It is made pho- 
tographically exact. 

Here is one of the tracings that are made from the photographic 



REPORT OF THE SPECIAL TAX COMMISSION. 279 

enlargement. The only difference between this and the photo- 
graphic enlargement is that the enlargement, of course, increases 
the width of the roads, and in retracing this the draughtsman has 
reduced the roads again by drawing through the middle of the 
enlargement and reduced it to secure the proper size of the road, 
but otherwise it is an exact copy of the portion of the map shown 
on the photographic enlargement. 

From these tracings prints can be produced in any number 
desired. Here is a contact print produced from that tracing. We 
can produce as many as we want by a very simple process. 

When you come to examine these topographical maps you will 
find every building in that area is shown here by a little black 
square or dot. That, of course, is reproduced in the tracing, re- 
produced in the enlargement and the print. So that we have located 
on the map not only the roads, railroads, but the buildings in their 
proper locations. 

Let me call your attention to the fact that on this scale of six 
inches to the mile one square mile would cover an area of thirty- 
six square inches. That means that one square inch will contain 
seventeen and three-quarter acres. There are very few farms as 
small as seventeen and three-quarter acres, which is. one inch on 
this map. You will find one acre will be covered by a rectangular 
space the side of which is more than one-fourth of an inch. 

According to the census figures of 1910 the rural population, 
which is all persons living outside of the cities and outside of the 
villages of more than twenty-five hundred, is forty to the square 
mile. Forty to the square mile gives one person to sixteen acres. 
In this particular part of the State, Madison county, the rural 
population is forty-two to the square mile, that is, one person to 
every fifteen acres. If we assume there are at least six persons on 
each farm it gives an average or ninety acres to the farm, and to 
show ninety acres on this scale would require five and one-half 
square inches. I don't think it would be difficult to show such a 
farm on a map on that scale. (Applause.) 

Chairman Ireland: Gentlemen, I think I simply voice the 
feeling of the Conference when I thank our brother here for his 
very instructive and able document, which is simply the opening 
wedge that is bound to come in the new conditions that confront 
every town and every board of assessors. Things are very much 



280 REPORT OF THE SPECIAL TAX COMMISSION. 

changed from what they were twenty years ago; new things and 
conditions are coming in and we must meet them. I thank him 
very much personally, and I know the voice of the Conference 
and that you thank him for this paper. 



PREPARATION OF A TOWN MAP FOR THE TOWN OF 
NEW CASTLE, WESTCHESTER COUNTY. 

By Sidney J. Smith. 
Chairman of the Board of Assessors, New Castle. 

Upon taking office on January 1, 1910, as an assessor of the 
town of New Castle, Westchester county, I found it had been the 
custom of the assessors to divide the town into three districts, 
each assessor assuming charge of the district in which he lived 
and making the assessments in that district. 

The town of New Castle covers an area of approximately 15,000 
acres. It has been the custom for each assessor to keep a crude 
field book in which he recorded the name of each owner of real estate 
and the area of the land owned by him and the value fixed upon 
it and nothing else. I had nothing to assist me except the town 
assessment roll. This roll being made up in alphabetical order 
of names of owners was of little assistance to me in preparing my 
field book, as the roll simply gave the names of the owners, quan- 
tity of land and the assessed value without any description whereby 
the land could be located, except in the case of land of non-resi- 
dents. So that I had nothing to guide me in preparing for my 
work that would indicate to me which parcels on the town roll lay 
within the district assigned to me. 

Section 20 of the Tax Law has been amended so that the as- 
sessors of a town are now prohibited from dividing the town into 
districts for the purposes of assessment. This, however, does not 
mean that the field book with its descriptions cannot be prepared 
by each assessor for his third of the town, but simply means that 
the fixing of the values for each parcel must be the joint deter- 
mination of the three assessors. However, in the town of New 
Castle we have endeavored as far as possible to act as a board 
both in the matter of preparing the description of the different 
parcels and in determining the values. 

Upon my taking office and studying the situation I became 
convinced that some method must be employed whereby I could 
become better acquainted with the division of the land among the 



282 REPORT OP THE SPECIAL TAX COMMISSION. 

farms and lots and with the names of the owners in my district 
in the town. The only solution of the difficulty seemed to be the 
preparation of some system of maps showing the location of the 
particular parcels to be assessed. Accordingly I divided my dis- 
trict into sections, using as boundaries the town boundaries and 
the highways. Starting at the extreme corner of the town, each 
separately assessed parcel was sketched upon a sheet of paper on 
which was indicated the public highways forming the boundaries 
of the section. 

The result of the first sectional map proving satisfactory I ex- 
tended the scheme of crudely sketched sectional maps throughout 
the entire district under my jurisdiction. Although these maps 
were very crudely made and were not made on any uniform scale, 
they were a wonderful help to me in my work. Even in their 
crude shape they showed with sufficient accuracy just where each 
particular parcel lay and to whom it was assessed. This, work oc- 
cupied considerable time and for it the town board allowed me 
$75, but did not seem anxious for me to go ahead, as some criti- 
cism was made that the maps were not authentic enough. I tried 
to impress upon my brother assessors the importance of making 
them in their sections, but they had been assessors respectively 
for the past ten and twenty years, and did not see the advantage 
or necessity of a similar map for their districts. Consequently a 
map system was out of the question for the time being. 

Upon being re-elected to the office of assessor, a new board of 
assessors was created, because two new men were elected as my 
associates. Our attention was taken up for some time with learn- 
ing our new duties, and the map question was therefore suspended 
until I received some literature from the tax conference. After 
reading this I was, convinced that the only proper method of as- 
sessment was by a map system. In addition to the general ad- 
vantages of a map, the necessity for it was made more apparent 
by the repeal or nullification of section 10 of the Tax Law. Under 
the new method of assessment enacted in 1911, each parcel of real 
estate within the town must be assessed by the assessor. Section 
10 had formerly provided that a parcel of real estate divided by 
a town boundary and lying partly in one town and partly in 
another should be assessed in the town in which the principal 
dwelling upon the farm was located. Now it became necessary 



REPORT OF THE SPECIAL TAX COMMISSION. 283 

to assess portions of farms in the town of New Castle, which here- 
tofore had been carried upon the assessment rolls of adjoining 
towns, because the principal dwelling house was located in this 
town. A map was needed to show such area of such portions lying 
in New Castle. 

The question now arose as to the easiest and cheapest method 
of preparing a town map. The cost of an actual survey of all land 
(about $5,000) seemed too high and the members of the town 
board did not seem to think that an outlay of such a sum of money 
would be justified. At this time it became my good fortune to 
become acquainted with the Hon. Lawson Purdy, of the tax board 
of the City of New York, and Mr. E. L. Heydecker, assistant tax 
commissioner of that city, active members of the State Tax Con- 
ference. The result of their advice and very valuable help is the 
preparation of a map of the town of New Castle, on which is shown 
every parcel of land, except in the unincorporated village of Chap- 
paqua, and in the incorporated village of Mt. Kisco. In these two 
localities the subdivision of the land required a larger scale than 
is used on the general town map. 

This map was started and finished in the following manner: 
Through the instrumentality of Mr. Heydecker I secured the map 
sheet of the United States Geographical Survey, showing the topo- 
graphical survey of the town of New Castle. This topographical 
map is on a scale of six inches to the mile. A tracing was made, 
in accordance with the suggestions contained in the paper read 
by Mr. Heydecker on "Tax Maps" at the Buffalo conference in 
January, 1912, on which were shown the roads, streams, water 
courses and railroads ; in short, all the natural boundaries and 
fixed points from which to locate the farm boundaries. This 
tracing was then enlarged six times, very accurately, by photog- 
raphy. A new tracing was then made from this enlargement, on 
which the width of the roads was reduced, but no other changes 
were made. From these tracings new prints were made and these 
prints then constituted a basic land map of the town of New 
Castle, on a scale of 880 feet to the inch, and the assessors were 
now ready to draw in the boundaries of the different farms and 
parcels. 

After a study of the map in its general form the actual work 
of drawing in the farm boundaries was begun by starting at a 



284 REPORT OF THE SPECIAL TAX COMMISSION. 

point of an intersection of highways, which was nearest my own 
home and making a block or division of the area bounded by the 
nearest highways on this block. The owners of property were 
consulted and the locality was visited and the boundaries of each 
farm or parcel sketched upon the map. Comparing the size of the 
parcel thus shown to the scale of the map (six inches to the mile, 
880 feet to the inch) and the number of acres assessed against 
each parcel, the general accuracy or inaccuracy of the sketch was 
clearly shown. 

While this method was splendid where land boundaries are 
finally fixed and known to the assessors and so could readily be 
entered upon the large sheet, it was found to be a better plan to 
have one of the maps cut into sheets of convenient size, and a 
book made of the sheets which could be carried by the assessor 
while traveling through the town and preparing the map. 

After the farm boundaries have been sketched in for each sec- 
tion or block according to the best information possessed by the 
assessors, corrections were made in the following way — by con r 
suiting the property owners and obtaining from them a view of 
their deeds and of their map surveys where they had them (and 
many such map surveys were found), the boundary lines were ad- 
justed. We found little difficulty in obtaining the assistance of 
the owners in this matter. They showed considerable curiosity, 
and when the matter was explained to them generally disclosed 
interest in the project and a readiness to assist. In addition to 
the direct inquiries of the owner valuable assistance was obtained 
from the older residents of the section who could tell of ancient 
boundary lines and of transfers between owners running back 
through a long period of years. In addition to all these sources 
of information we found great assistance in the filed maps on 
record in the office of the registrar of the county, and in the maps 
prepared by the engineers and surveyors for laying out of new roads, 
and the maps of the property taken by New York City 'for the 
water shed of the Croton aqueduct. The published atlases, road 
maps, etc., also gave many valuable points, although these atlases 
do not show the farm lines. With all these aids followed by actual 
visits to the particular parcels we were able to prepare the map, 
which is shown herewith. 



REPORT OF THE SPECIAL TAX COMMISSION. 285 

Results of a tax map. 

The first result of such a map is a great increase in the ac- 
curacy and equality of the assessment by the assessors. It enables 
them to consider each parcel in relation to its adjoining parcels 
and its relation to the general topography of the town. 

The next result is that the assessors are able to check up their 
work and determine whether they have put upon the tax roll all 
parcels of real estate. We have already found in the town of New 
Castle several parcels which have been omitted from the roll. We 
have also found a large number of parcels which have been carried 
upon the roll at a much smaller area in acres than they actually 
contained. These additions and corrections alone justify the time 
and expense of such a map. 

This map will tend to reduce complaints upon the part of tax- 
payers because they will now be able to study the map and deter- 
mine for themselves as they never could do before the relative 
value of their farms and comparison with the farms of their neigh- 
bors. This will tend to do away with the feeling that all assess- 
ments are unequal and unjust and that one owes it as a duty to 
protest. Another result is the arousing of interest in the work 
of the assessors through the assistance given by the owners to 
the assessors in the work of preparing the map. The fact that 
the owners are consulted and that the assessors are known to be 
trying to make the map accurate greatly stimulates the interest 
in the work of the assessors on the part of the taxpayer and in- 
ducing him to investigate. Such criticism as he bestows upon 
the work of the assessor is as a rule much more intelligent than 
has heretofore been the case. 

Still another advantage of a tax map is that it will enable the 
school trustees to get a correct list of the parcels and names of 
owners within their school districts — because a study of the map 
will disclose the boundary of the school districts and all the parcels 
within the boundaries can readily be ascertained from the map. It 
will be a great advantage to have the boundaries of the school 
districts entered upon the map and this can be done by the as- 
sessors in apportioning special franchise values among the school 
tion of the school district boundaries by the Education Depart- 
ment. 



286 REPORT OF THE SPECIAL TAX COMMISSION. 

Another advantage is the lightening of the labors of the as- 
sessors in apportioning special franchise values among the school 
districts and villages and special taxing districts within the town 
and in like manner in determining the special district taxes 
for the special taxing districts within the town, such as fire, light- 
ing, water, sewer, sidewalk, etc. 

And, finally, such a map will very materially aid in the descrip- 
tion of property sold for taxes in that each parcel can be accurately 
bounded by a reference to the map, and hence the sale can be 
legally made. 

In former years the town of New Castle had each year been 
obliged to provide in its budget for loss of revenue in the preceding 
year's budget owing to what has been termed "erroneous taxes." 
Doubtless other towns in the State have had the same experience. 
These so-called "erroneous taxes" have been due to errors in the 
assessment roll arising in various ways. For example, names have 
been carried over from year to year of persons who are non-resi- 
dents having no property in the town, or were residents without 
property or names of persons who had died leaving no property. 
The assessors finding the names upon the former roll frequently 
copied the names onto the current roll because they knew nothing 
about the man. Again the description of property was so vague 
that it could not be located, nevertheless, such assessments form 
part of the basis on which the taxes were levied, and, of course, 
resulted in a loss to the town through its inability to collect taxes 
upon these "erroneous assessments." All this would be done away 
with. When assessments are made upon a map basis the town 
finances will be very greatly simplified as a consequence. 

The cost oi such a map, the actual cost of the foregoing en- 
largement, tracing and prints has not exceeded $75 in the town 
of New Castle. The length of time of the asse_ssors required to 
draw in the farm boundaries will have to be determined by the 
assessors or by the town board in each case. 

Conclusion. 

The map of New Castle is not claimed to be absolutely ac- 
curate ; it cannot be until it is based upon an actual survey, but it 
is sufficiently accurate to enable the assessors and others to locate 



REPORT OF THE SPECIAL TAX COMMISSION. 287 

upon it any parcel upon the roll and through the co-operation oi 
the assessors and taxpayers it can be improved in accuracy with 
each year. The elimination of errors and the listing of all prop- 
erty within the town will result in an increased revenue to the 
town, which will far exceed the cost involved in its preparation. 



MINNESOTA TAX COMMISSION. 

Chapter 408— S. F. No. 475. 

A'N ACT to create a permanent tax commission, denning the 
duties of said commission and making an appropriation there- 
for, and abolishing the State Board of Equalization. 

Be it enacted by the Legislature of the State of Minnesota: 

§ 1. There is hereby created a commission, to be designated 
and known as the Minnesota Tax Commission. 

§ 2. The said Minnesota Tax Commission shall be composed 
of three members, who shall be appointed by the Governor by and 
with the advice and consent of the Senate. The three persons first 
composing said commission shall be appointed within ten (10) 
days after the passage of this act and before the adjournment of 
the present Legislature, if practicable. 

§ 3. Of such three persons composing said commission, one 
shall be appointed and designated for a term ending January 31, 
1909; one for a term ending January 31, 1911, and one for 
a term ending January 31, 1913, each of said periods and 
terms of office to begin upon the qualification of the person 
appointed therefor. Upon the expiration of the terms of the three 
commissioners first to be appointed as aforesaid, each succeeding 
commissioner shall be appointed and hold office for the term of 
six (6) years, except in the case of a vacancy as hereinafter pro- 
vided, and each commissioner shall hold office until his successor 
shall have been appointed and qualified. The Governor shall have 
power to remove a commissioner for inefficiency, neglect of duty 
or malfeasance in office, but, before removal, the commissioner 
shall be furnished with a copy of the charges against him, and 
have an opportunity to be heard in defense. 

§ 4. After the appointment of said first three commissioners, 
or except when appointed to fill a vacancy, each commissioner 
shall be appointed on or before the last Monday in January next 
preceding the commencement of the term for which he shall be 
appointed. 

In case of a vacancy it shall be filled by appointment by the 
Governor for the unexpired portion of the term in which said 



REPORT OE THE SPECIAL TAX COMMISSION. 289 

vacancy occurs. Said appointment to be confirmed by the Senate. 
If such appointment is made when the Legislature is not in ses- 
sion, the appointee shall hold office until the first Monday in 
February during the next succeeding session of the Legislature, 
when, if such appointment is not confirmed, the office shall become 
vacant, and on or before the last Monday in February in the same, 
month, the Governor by and with -the advice and consent of the 
Senate shall appoint a suitable person to fill such vacancy for the 
remainder of such term. 

§ 5. The persons appointed to be members of such commis- 
sion shall be such as are known to possess knowledge of and 
training in the subject of taxation and taxing laws, and skilled in 
matters pertaining thereto. So far as practicable, they shall be 
non-partisan and shall be so selected that the commission will not 
be composed of more than two persons who are members or af- 
filiated with the same political party or organization. No person 
appointed a member of .said commission shall hold any other of- 
fice under the laws of this State, nor any office under the Govern- 
ment of the United States or any other State. 

Each commissioner and each employe shall devote his entire 
time to the duties of the office and shall not hold any position of 
trust or profit, engage in any occupation or business interfering 
with or inconsistent with his duties as such commissioner or em- 
ploye, or serve on or under any committee of any political party 
or .take part either directly or indirectly, in any political campaign 
in the interest of any political party or organization or candidate 
for office. 

§ 6. Each commissioner and employe shall, within thirty (30) 
days after notice of his appointment, and before entering upon the 
discharge of his duties, take, subscribe and file with the Secre- 
tary of State the oath of office prescribed by the Constitution of 
this State. 

§ 7. The member of said commission whose term of office ex- 
pires January 31, 1909, shall be the chairman of said commission 
during his term of office, and thereafter the member who has the 
shortest term of service shall be chairman during the remainder 
of his term. 

Each of the members of the said commission shall receive an 
annual salary of four thousand five hundred ($4,500) dollars in 

10 



290 REPORT OF THE SPECIAL TAX COMMISSION. 

equal monthly installments in the same manner that other State 
salaries are paid. 

§ 8. The commission first appointed under this act, after hav- 
ing duly qualified, shall, without delay, meet at the Capitol in 
St. Paul. A majority of said commission shall constitute a quorum 
for the transaction of business and the performance of the duties 
of said commission. The said commission shall be in continuous 
session and open for the transaction of business every day, except 
Sundays and legal holidays, and the sessions of said commission 
shall stand and be deemed to be adjourned from day to day with- 
out formal entry thereof on its records. The commission may hold 
session in conducting investigation at any other place than the 
Capitol when deemed necessary to facilitate and render more 
thorough the performance of its duties. 

§ 9. Said commission may appoint a secretary at a salary not 
to exceed twenty-four hundred ($2,400) dollars per annum, and 
such other experts, assistants and clerks, one of whom shall be 
stenographer, as may be necessary. Provided, however, that the 
total expense for such experts, assistants and clerks, exclusive of 
said secretary, shall not exceed six thousand ($6,000) dollars per 
annum. And provided, further, that if it become necessary to em- 
ploy experts, and assistants and clerks beyond such as can be ob- 
tained for said sum of six thousand ($6,000) dollars, then said com- 
mission may, with the approval and consent of the Governor, 
Attorney General and State Auditor, employ such additional as- 
sistants as may be necessary. The .secretary of the commission 
shall keep full and correct minutes of all the testimony taken, hear- 
ings had and the proceedings of said commission, and shall per- 
form such other duties as may be required by .said commission. 
The said commission shall have power to make all necessary or 
needful rules consistent with the laws of this State for the orderly 
and successful performance of its duties and for conducting hear- 
ings and other proceedings before it. 

§ 10. The commission shall be provided with suitable and 
necessary office furniture, supplies, stationery, books, periodicals, 
newspapers, maps and financial and commercial reports and all 
necessary expenses therefor shall be audited and paid as other 
expenses are audited and paid. 



REPORT OF THE SPECIAL TAX COMMISSION. 291 

The actual necessary expenses of the commission and its" secre- 
tary, clerks and such experts and assistants as may be employed 
by said commission while traveling on the business of the com- 
mission shall be paid by the State, such expenditures to be sworn 
to by the party who incurred the expense and approved by the 
chairman of the commission or a majority thereof. 

§ 11. It shall be the duty of the commission and it shall have 
power and authority: 

(1) To have and exercise general supervision over the admin- 
istration of the assessment and taxation laws of the State, over as- 
sessors, town, county and city boards of review and equalization 
and all other assessing officers in the performance of 'heir duties 
to the end that all assessments of property be made relatively just 
and equal in compliance with the laws of the State. 

(2) To confer with, advise and give the necessary instructions 
and directions to local assessors throughout the State as to their 
duties under the laws of the State, and to that end call meetings 
of local assessors of each county, to be held at the county seat of 
such county for the purpose of receiving necessary instruction 
from the commission as to the laws governing the assessment and 
taxation of all classes of property. 

(3) To direct proceedings, action and prosecutions to be in- 
stituted to enforce the laws relating to the liability and punish- 
ment of public officers and officers and agents of corporations for 
failure or negligence to comply with the provisions of the laws of 
this State governing returns of assessment and taxation of prop- 
erty, and to cause complaints to be made against local assessors, 
members of board of equalization, members of boards of review 
or any other assessing or taxing officer, to the proper authority, 
for their removal from office for misconduct or negligence of duty. 
To require county attorneys to assist in the commencement of 
prosecutions in actions or proceedings for removal, forfeiture and 
punishment for violation of the laws of the State in respect to the 
assessment and taxation of property in their respective districts 
or counties. 

(4) To require town, city, village, county and other public of- 
ficers to report information as to the assessment of property, col- 
lection of taxes received from licenses and other sources, and such 
other information as may be needful in the work of the commis- 



292 REPORT OP THE SPECIAL TAX COMMISSION. 

sion, in such form and upon such blanks as the commission may 
prescribe. 

(5) To require individuals, co-partnerships, companies, associa- 
tions and corporations to furnish information concerning their 
capital, funded or other debt, current assets and liabilities, earn- 
ings, operating expenses, taxes as well as all other statements 
now required by law for taxation purposes. 

(6) To summon witnesses to appear and give testimony, and 
to produce books, records, papers and documents relating to any 
tax matter which the commission may have authority to investi- 
gate or determine. 

(7) To cause the deposition of witnesses residing within or 
without the State, or absent therefrom, to be taken, upon notice 
to the interested party, if any, in like manner that depositions of 
witnesses are taken in civil action in the district court in any 
matter which the commission may have authority to investigate 
or determine. 

(8) One or more members of the commission shall officially 
visit at least one-half of the counties of the State annually, and 
.shall visit every county in the State at least once in two years 
and inquire into the methods of assessment and taxation and ascer- 
tain whether the assessors faithfully discharge their duties, par- 
ticularly as to their compliance with this act requiring the assess- 
ment of all property not exempt from taxation. 

(9) To investigate the tax laws of other States and countries 
and to formulate and submit to the Legislature of the State such 
legislation as said commission may deem expedient to prevent 
evasions of assessment and taxing laws and to secure just and 
equal taxation and improvement in the system of assessment and 
taxation in this State. 

(10) To consult and confer with the Governor of the State upon 
the subject of taxation, the administration of the laws in regard 
thereto, and the progress of the work of the commission, and to 
furnish the Governor from time to time such assistance and in- 
formation as he may require relating to tax matters. 

(11) To transmit to the Governor on or before the third Mon- 
day in December of each even numbered year, and to each mem- 
ber of the Legislature on or before January 1, of each odd num- 
bered year, the report of the commission for the preceding years, 



REPORT OF THE SPECIAL TAX COMMISSION. 293 

showing all the taxable property in the State and the value of the 
same, in tabulated form. 

(12) To exercise and perform such further powers and duties 
as may be required or imposed upon the commission by law. 

§ 12. The said Minnesota Tax Commission shall have and 
exercise all the rights, powers and authority by law vested in the 
State Board of Equalization, which said board of equalization is 
hereby continued, with full power and authority to review, modify 
and revise, all of the acts and proceedings of said commission in 
so far as they relate to the equalization and valuation of property 
assessed for taxation, as prescribed by section 863, Revised Laws 
of 1905, which State Board of Equalization shall meet on the sec- 
ond Tuesday in September of each year during its existence. The 
said Minnesota Tax Commission shall also have the following 
powers and duties: 

(1) To require the auditor of each county in the State to file 
with the tax commission on or before the fourth Monday in August 
each year complete abstracts of all real and personal property in 
the county as equalized by the county board of equalization and 
itemized by assessment districts, said abstracts to be accompanied 
by a printed or typewritten copy of the proceedings of said county 
board of equalization, and it shall be the duty of the county auditor 
to so report to the tax commission. 

(2) To order reassessment of all real and personal property or 
either in any assessment district when in the judgment of said 
commission such reassessment is advisable or necessary to the 
end that any and all classes of property in such assessment dis- 
trict shall be assessed in compliance with the law. 

(3) To require county auditor to carefully place upon the as- 
sessment rolls omitted property which may be discovered to have 
for any reason escaped assessment and taxation in previous years 

(4) To receive complaints and to carefully examine into all 
cases where it is alleged that property subject to taxaton has not 
been assessed or has been fraudulently or for any reason improp- 
erly or unequally assessed, or the law in any manner evaded oi 
violated, and to cause to be instituted such proceedings as will 
remedy improper or negligent administration of the taxing of the 
State, 



294 REPORT OP THE SPECIAL TAX COMMISSION. 

Prior to the annual meetings of the State Board of Equalization 
each year, and subject to review as herein stated, to raise or lower 
the assessed valuation of any or all real and personal property, or 
any portion thereof within the State. 

Prior to the annual meetings of the State Board of Equaliza- 
tion, to raise or lower the assessed valuation of any real and of 
any personal property in the State, including the right and au- 
thority to raise or lower the assessment of the real and personal 
property of any individual, co-partnership, company, association 
or corporation, first giving notice to such persons of their inten- 
tion to do so, which notice shall fix a time and place of hearing, 
to .the end that the assessed valuation of all property throughout 
the State shall be as nearly equal as may be upon any given class 
of property. 

§ 13. A record of all proceedings of the Minnesota Tax Com- 
mission affecting any change in the assessed valuaaon of any 
property, as revised by the State Board of Equalization, shall be 
kept by the secretary of the commission and a copy thereof duly 
certified shall be mailed to the county auditor of each county 
wherein such property is situated. Which record shall specify the 
amounts or amount, or both, added to or deducted from the valua- 
tion of the real property of each of the several towns, villages and 
cities, and of the real property not in towns, villages or cities, also 
the per cent, or amount of both, added to or deducted from the 
several classes of personal property in each of the towns, villages 
and cities, and also the amount added to or deducted from the as- 
sessments of individuals, co-partnerships, associations or corpora- 
tions. The county auditor shall add to or deduct from such tract 
or lot or portion thereof of any real property in his county the re- 
quired per cent, or amount, or both, on the valuation thereof as 
it stood after equalized by the county board, adding in each case 
a fractional sum of fifty cents or more, and deducting in each case 
any fractional sum of less than fifty cents, so that no valuation of 
any separate tract or lot shall contain any fraction of a dollar; 
and shall also add to or deduct from the several classes of personal 
property in his county the required- per cent, or amount, or both, 
on the valuation thereof as it stood after equalized by the county 
board, adding or deducting in manner aforesaid any fractional 
sum, so that no valuation of any separate class of personal prop- 



REPORT OF THE SPECIAL TAX COMMISSION. 295 

erty shall contain a fraction of a dollar, and shall also add to or 
deduct from assessments of individuals, co-partnerships, associa- 
tions or corporations, as they stood after equalization by the 
county board, the required amounts to agree with the assessments 
as returned by the Minnesota Tax Commission. 

§ 14. The county auditor shall calculate the rate per cent. 
necessary to raise the required amount of the various taxes on 
the assessed valuation of all property as returned by the Minne- 
sota Tax Commission. 

§ 15. Oaths to witnesses in any matter under the investiga- 
tion or consideration of the commission may be administered by 
the .secretary of the commission or any member thereof. In case 
any witness shall fail to obey any summons or appear before said 
commission, or shall refuse to testify or answer any material ques- 
tions or to produce records, books, papers or documents when re- 
quired so to do, such failure or refusal shall be reported to the 
attorney general, who shall thereupon proceed in the proper court 
to compel obedience to any summons or order of the commission, 
or to punish witnesses for any such neglect or refusal. 

§ 16. Whenever it shall be made to appear to the tax commis- 
sion, by verified complaint or by the finding of a court, or of the 
Legislature or either body of the same, or any committee thereof, 
that any considerable amount of property has been improperly 
omitted from the tax list and assessment roll of any county for 
any year or years, or, if assessed, that the same has been grossly 
undervalued by the assessor or other taxing official, whether or 
not such assessment has been reviewed by the county or State 
Board of Equalization, they shall proceed to reassess such prop- 
erty in the manner prescribed by sections 854 to 858, inclusive, oi 
the Revised Laws of 1905, and for such purpose shall appoint such 
examiners and deputies as they shall deem necessary, and in fixing 
their compensation they shall not be limited to the compensation 
provided for by section 856 of the said Revised Laws. The ex- 
penses of such reassessment shall be paid as provided by section 
858 of said Revised Laws of 1905. 

The terms of office of all members of the State Board of Equal- 
ization now or .hereafter appointed shall end on the 31st day of 
January, 1909, and from and after said time, said State Board oi 
Equalization shall cease to exist and be discontinued, and there- 



296 REPORT OF THE SPECIAL TAX COMMISSION. 

after all of the powers and duties now vested by law in said State 
Board of Equalization shall devolve upon and be exercised by said 
Minnesota Tax Commission. 

§ 17. For the purposes of this act there is hereby annually 
appropriated out of the treasury of the State, not otherwise ap- 
propriated, the sum of thirty thousand dollars ($30,000). 

§ 18. All acts or parts of acts inconsistent herewith are hereby 
repealed. 

§ 19. This act shall take effect and be in force from and after 
its nassage. 

Approved April 25, 1907. 



MORTGAGE REGISTRY TAX LAW. 

Chapter 328— H. F. No. 561. 

AN ACT to provide for the taxation of mortgages of real property. 
Be it enacted by the Legislature of the State of Minnesota: 

§ 1. The words "real property," "real estate" and "land," as 
used in this act, in addition to the definitions thereof contained in 
the Revised Laws of 1905, shall include all property a conveyance 
whereof may be recorded or registered by a register of deeds under 
existing laws; and the word "mortgage," as so used, shall mean 
any instrument creating or evidencing a lien of any kind on such 
property, given or taken. as security for a debt, notwithstanding 
such debt may also be secured in part by a lien upon personalty. 
An executory contract for the sale of land, under which the vendee 
is entitled to or does take possession thereof, shall be deemed, foi 
the purposes of this act, a mortgage of said land for the unpaid 
balance of the purchase price. No instrument relating to real es- 
tate shall be valid as security for any debt, unless the fact that it 
is so intended and the amount of such debt are expressed therein. 
But a mortgage given to correct a misdescription of the mort- 
gaged property, or to include additional security for the same in- 
debtedness, shall not be subject to the tax imposed by this act; 
nor shall a mortgage securing the same and other indebtedness, 
additional to that upon which such tax has been paid, be taxable 
hereunder, except for such added sum. 

§ 2. A tax of 50 cents is hereby imposed upon each hundred 
dollars, or major fraction thereof, of the principal debt or obliga- 
tion which is, or in any contingency may be, secured by any mort- 
gage of real property situate within the State, which mortgage 
is recorded or registered on or after April 30, 1907; provided that 
if any such mortgage shall describe any real estate situate outside 
of this State, such tax shall be imposed upon such proportion oi 
the whole debt secured thereby as the value of the real estate 
therein described situate in this State bears to the value of the 
whole of the real estate described therein, as such value shall be 
determined by the State Auditor upon application of the mort- 
gagee." 



298 REPORT OF THE SPECIAL TAX COMMISSION. 

§ 3. All mortgages upon which such tax has been paid, with 
the debts or obligations secured thereby and the papers evidencing 
the same, shall be exempt from all other taxes; but nothing herein 
shall exempt such property from the operation of the laws relating 
to the taxation of gifts and inheritances, or those governing the 
taxation of banks, savings banks or trust companies; provided, that 
this act shall not apply to mortgages taken in good faith by per- 
sons or corporations whose personal property is expressly ex- 
empted from taxation by law, or is taxed upon the basis of gross 
earnings, or other methods of commutation in lieu of all other 
taxes. 

§ 4. If a mortgage is made to a mortgagee in trust, to secure 
the payment of bonds or other obligations to be issued thereafter, 
a statement may be incorporated therein of the amount of such 
obligations already issued or to be issued forthwith, and the tax 
to be paid on filing such mortgage for record or registration shall 
be computed upon the amount so stated. Such statements shall 
be binding and conclusive upon all persons claiming through or 
under the mortgage, and no such obligation issued in excess of 
the aggregate so fixed shall be valid for any purpose unless the 
additional tax thereon be paid and the receipt of the proper county 
treasurer therefor be endorsed thereon. 

§ 5. The tax imposed by this act shall be paid to the treasurer 
of the county m which the mortgaged land or some part thereof 
is situated, at or before the time of filing the mortgage for record 
or registration. The treasurer shall endorse his receipt on the 
mortgage, countersigned by the county auditor, who shall charge 
the amount to the treasurer, and such receipt shall be recorded 
with the mortgage, and such receipt of the record thereof shall 
be conclusive proof that the tax has been paid to the amount 
therein stated, and shall authorize any register of deeds to record 
the mortgage. Its form in substance shall be "registration tax 
hereon of dollars paid." If the mort- 
gage be exempt from taxation the endorsement shall be "exempt 
from registration tax," to be signed in either case by the treasurer 
as such, and in case of payment to be countersigned by the auditor. 
In case the treasurer shall be unable to determine whether a claim 
of exemption should be allowed the tax shall be paid to the clerk 
of the district eoiift Qf the county to abide the order of such court 



REPORT OF THE SPECIAL TAX COMMISSION. . 299 

made upon motion of the county attorney, or of the claimant upon 
notice as required by the court. When any such mortgage covers 
real property situate in more than one county in this State the 
whole of such tax shall be paid to the county treasurer of the 
county where the mortgage is first presented for record or regis- 
tration, and the payment shall be receipted and countersigned as 
above provided, and such tax shall be divided and paid over by 
the county treasurer receiving the same on or before the tenth day 
of each month after receipt thereof to the county or counties en- 
titled thereto in the ratio which the assessed value of the real 
property covered by the mortgage in each county bears to the 
assessed value of all the property described in the mortgage. In 
making such division and payments the county treasurer shall 
send therewith a statement giving the description of the property 
described in the mortgage and the assessed value of the part 
thereof situate in each county. And for the purpose aforesaid the 
county treasurer of any county may require the county treasurer 
of any other county to certify to him the assessed valuation of 
any tract of land in any such mortgage. 

§ 6. When any real estate situate in this State and described 
in any .such mortgage is not taxed by direct tax upon the assessed 
valuation thereof, then the tax herein provided shall be paid to 
the State Treasurer and credited to the general revenue fund. The 
receipt thereof shall be endorsed upon the mortgage by the State 
Treasurer and countersigned by the State Auditor, who shall 
charge the treasurer therewith, and thereupon such mortgage shall 
be recorded or registered, as to such real estate in any office in 
this State, and thereupon such mortgage may be recorded or regis- 
tered, but as to all real property described in any mortgage taxed 
upon an assessed valuation the registry tax shall be paid as pro- 
vided in section 5 hereof. 

§ 7. No such mortgage, no papers relating to its foreclosure, 
nor any assignment or satisfaction thereof shall be recorded or 
registered after April 30, 1907, unless said tax shall have been paid; 
nor shall any such document, or any record thereof, be received 
in evidence in any court, or have any validity as notice or other- 
wise. 

§ 8. All mortgages of real estate prior to April 30, 1907, shall 
be taxable as provided by law under the provisions of law re- 



300 REPORT OF THE SPECIAL TAX COMMISSION. 

lating thereto prior to the enactment hereof; provided, that the 
holder of any such mortgage may pay to the treasurer of the 
proper county, or the State Treasurer, or both, the tax herein pre- 
scribed upon the amount of the debt secured by such mortgage at 
the time of such payment, as stated by the affidavit of the owner 
of such mortgage, to be filed with the county treasurer, and have 
the treasurer's receipt countersigned by the auditor endorsed 
thereon. The register of deeds or Secretary of State, as the case 
may be, on presentation of such receipt, shall note on the margin 
of the mortgage record the date and amount of such payment. 
Thereafter such mortgage debt shall not be otherwise taxable. 

§ 9. All taxes paid to the county treasurers under the pro- 
visions of this act shall be apportioned and distributed in the same 
manner as real estate taxes paid upon the real estate described in 
the mortgage. 

§ 10. This act shall take effect and be in force from and after 
April 30, 1907. 

Approved April 23, 1907. 



CHAPTER 285, LAWS OF MINNESOTA, 1911, RELATING 
TO THE ASSESSMENT AND TAXATION OF MONEY 
AND CREDITS. 

Together with the Text of the Decision of the Supreme Court 
sustaining the constitutionality of the law, and denying the 
right to deduct debts from credits, and a brief synopsis of the 
law. 

Synopsis of the law. 

Money and credits have always been subject to taxation in 
Minnesota. Chapter 285, Laws of 1911, simply changes the 
method of listing and assessing this class of property. 

Under the old law, such property was listed on the same blanks, 
and taxed at the same rate as other classes of personal property, 
while under the new law it is listed on separate blanks, and is 
taxed at a flat rate of three mills on the dollar, or thirty cents on 
each hundred dollars of valuation. 

"Money," as defined in the law, means money owned by an 
individual, firm or corporation, whether in hand or on deposit in 
a bank in this or some other State. 

"Credits" cover all book accounts, bills receivable, land con- 
tracts not recorded, promissory notes, bonds, rents, annuities and 
all other claims or demands for money or other valuable thing. 

The law does not include the money and credits of incorporated 
banks in this State, or notes and bonds secured by real estate mort- 
gages recorded in this State upon which the mortgage registry tax 
has been paid, or the bonds of any municipality issued since April 
18, 1911. " 

The assessment is to be made at the fair cash value of the prop- 
erty, and not at a percentage of such value. 

Debts cannot be deducted from credits. Winona Motor Co. 
vs. State of Minnesota, 134 Northwestern Reporter, page 643. 

The law requires each taxpayer to make a verified return of his 
money and credits on the listing blank furnished him by the as- 
sessor. Even though he does not own any of this class of prop- 
erty he should return his list to the assessor setting out such fact 
duly sworn to. 



302 REPORT OP THE SPECIAL TAX COMMISSION. 

The assessor is required to accept as true the items of the list 
as returned, unless the person making such return refuses to an- 
swer on oath all reasonable and necessary inquiries as to the nature 
and amount of his property taxable under the law. The assessor 
may, however, place his own valuation on the property so listed 
when in his judgment the valuation returned by the owner is not 
the full and true value of such property. 

If any person, firm or corporation subject to taxation under this 
law fails or refuses to make a return as provided for in section 2 
of the act, it is the duty of the assessor to ascertain as nearly as 
possible the particulars of this class of property owned by such 
person, and to estimate its just value "according to his best in- 
formation and belief," and to so assess it, and then add 50 per 
cent, to the valuation as a penalty for failure or refusal to list. 

In making an arbitrary assessment as provided for in sections 
7 and 8 of the act, if the person against whom the arbitrary as- 
sessment is made was assessed for this class of property in 1911, 
the assessor cannot fix the amount this year at less, but may make 
it more than the amount legally assessed against such person last 
year. 

When a person subject to this tax has removed from one dis- 
trict to another within the State since the last assessment was 
•made, and fails to make a return of such property, the assessor 
is required to assess such person at an amount not less than that 
for which he was assessed last year in the district from which he 
removed, which amount is to be ascertained from the county 
auditor of the county in which such district is located. 

In making an arbitrary assessment the law does not require the 
assessor to have exact knowledge of the value of the property; he 
is authorized to make the assessment upon "his best information 
and belief." If he should overvalue such property, the fault is not 
in the assessor, but in the person who failed to list. 

The verified list should be returned to the assessor on or be- 
fore June 1. 

The assessment under this law is reviewed and equalized in the 
same manner as the assessment of other personal property is re- 
viewed and equalized. 



REPORT OF THE SPECIAL TAX COMMISSION. 303 

Chapter 285, Laws of Minnesota, 1911. 

An act establishing a uniform tax on certain classes of personal 

property. 
Be it enacted by the Legislature of the State of Minnesota: 

§ 1. "Money" and- "Credits" as the same are defined in sec- 
tion 798, "Revised Laws of 1905," are hereby exempted from taxa- 
tion other than that imposed by this act and shall hereafter be sub- 
ject to an annual tax of three mills on each dollar of the fair cash 
value thereof. 

But nothing in this act shall apply to money or credits belong- 
ing to incorporated banks situated in this State, nor to any in- 
debtedness on which tax is paid under chapter 328, General Laws 
of 1907. 

§ 2. All "Money" and all "Credits" taxable under this act 
shall be listed in the manner provided in section 816, "Revised 
Laws of 1905," but such listing shall be upon a separate blank from 
that upon which other personal property is listed. 

§ 3. Before making an assessment of "Money" and "Credits" 
under this act the assessor shall give seasonable notice to the in- 
habitants of his district in the manner prescribed in section 808, 
"Revised Laws of 1905." He shall require each individual, co- 
partnership, company, association or corporation in his district to 
bring in before a date therein specified and not later than the first 
day of July a true list of all their "Monies" and "Credits" taxable 
under this act. 

§ 4. The Minnesota Tax Commission shall annually pre- 
pare instructions for bringing in the lists required by the preceding 
section. They shall prepare and distribute through the county 
auditors to the assessors a form for the returns which the tax- 
payers are required to make by this act, and this form shall be 
printed on a separate sheet, and shall be entirely distinct from the 
forms prepared for the returns of other classes of property. This 
form shall require the taxpayer to make a return of the total 
amount of his "Money" and "Credits" taxable under this act. 

The Minnesota Tax Commission shall cause to be printed and 
shall furnish assessors blank lists for the return of property tax- 
able under this act, and the assessor shall distribute a blank list 
to every pers'on liable to taxation. 



304 REPORT OF THE SPECIAL TAX COMMISSION. 

§ 5. The assessor shall in all cases require a person bringing 
in a list to make oath that it is as nearly correct as he is able to 
make it and this oath shall be attached to and be a part of such 
list. 

Such list shall be open to the inspection of the assessor, county 
auditor, their deputies and clerks, the board of review, the board 
of equalization, their clerks, the Minnesota Tax Commission and 
its assistants and clerks, but the details of the lists made by tax- 
payers shall be disclosed to no other person except by order of 
court, and any assessor or other person who shall disclose such 
details shall be liable to a fine of not less than one hundred dol- 
lars nor more than five hundred dollars. The lists shall be deliv- 
ered by the assessor to the county auditor and by him preserved. 

§ 6. The assessors shall receive as true except as to valuation, 
the list brought in by each person, unless on being thereto re- 
quired by the assessor he refuses to answer on oath all reasonable 
and necessary inquiries as to the nature and amount of his prop- 
erty taxable under the provisions of this act. 

- § 7. The assessor shall ascertain as nearly as possible the par- 
ticulars of the personal estate subject to taxation under this act 
of any person who has not brought in such list, and shall estimate 
its just value according to his best information and belief. He 
shall also add thereto fifty per cent, of the estimated value of such 
property as a penalty; and such estimate, with the penalty of 
fifty per cent., shall be entered in the valuation books, and shall 
be conclusive upon any person who has not seasonably brought in 
a list of his estate unless he can show reasonable excuse for the 
omission. 

§ 8. In making such estimate the assessor shall specify the 
amount of "Money" and "Credits" separately and shall enter the 
same upon the books furnished under the provisions of section 
10 of this act. An error or overestimate, or either, shall not be 
taken into account in determining whether a person is entitled to 
abatement, but only the aggregate amount of such estimate. 

§ 9. After property taxable under the provisions of this act 
has been legally assessed to any inhabitant of the State of Minne- 
sota, including any executor, administrator or trustee, an amount 
not less than that last assessed by the assessor of such district 
in respect of such property shall be deemed to be the sum as- 



REPORT OF THE SPECIAL TAX COMMISSION. 305 

sessable, until a true list of such property is brought in to the 
assessor in accordance with the provisions of section 3 of this act. 
When a person liable to be taxed for personal property included 
within the provisions of this act changes his domicile, the assessor 
of the district to which he removes shall assess him for an amount 
not less than that for which he was assessed in the district from 
which he removed, until he files the list required by section 3 of 
this act. The duties of assessors under this section shall be the 
same as prescribed in section 858, Revised Laws of 1905, and who- 
ever neglects to perform any duty imposed upon him by this sec- 
tion shall be guilty of a misdemeanor. 

§ 10. Property taxable under this act shall not be included in 
the valuation list which assessors are required to make under the 
provisions of section 835, Revised Laws of 1905, but shall be listed 
m a separate book or in a supplement to the regular assessment 
book which the county auditor shall provide for each assessor on 
or before the first day of May each year. 

This book or supplement shall show the total amount of 
"Money" and "Credits" assessed to each taxpayer under the pro- 
visions of this act, and shall not disclose further details of his 
assessment. It shall contain also a summary showing the num- 
ber of individuals, firms, associations, trustees, etc., assessed for 
such property and the total amount of "Money" and "Credits" tax- 
able under the provisions of this act. When making the return 
to the county auditor provided for by section 850, Revised Laws of 
1905, the assessor shall file this valuation book, or supplement, to- 
gether with the summary of the same and the listing blanks filled 
out by each taxpayer assessed under the provisions of this act. 

The county auditor, when compiling the returns required by 
section 862, Revised Laws of 1905, shall include, under a separate 
heading, the aggregate assessment in each district of property 
assessed under the provisions of this act. 

§ 11. The assessment under this act shall be reviewed and 
equalized the same as the assessment of other personal property 
is reviewed and equalized. 

§ 12. The county auditor of each county shall compute the 
taxes under this act each year against each individual, co-partner- 
ship, company, association or corporation and he may include such 
tax on the personal property tax list with the other personal prop- 



306 REPORT OF THE SPECIAL TAX COMMISSION. 

erty tax levied against such individual, co-partnership, company, 
association or corporation where the assessment is made. 

The tax levied under this act shall be collected by the county 
treasurer, or sheriff, the same as other personal property taxes are 
collected. 

§ 13. All taxes paid to the county treasurer under the pro- 
visions of this act shall be apportioned, one-sixth to the revenue 
fund of the State of Minnesota, one-sixth to the county revenue 
fund, one-third to the city, village or town, and one-third to the 
school district in which the property is assessed. 

§ 14. This act shall take effect and be in force from and after 
its passage. 

Decision of the Supreme Court. 

17440 — State of Minnesota, Supreme Court, October Term, A. D. 
1911. No. 12. 

State of Minnesota ex rel ; Winona Motor Co., Relator vs. Minne- 
sota Tax Commission, Respondent. 

Syllabus. 

1. Chapter 285, Laws 1911, providing for the taxation of 
money and credits, held a complete revision of prior statutes upon 
the subject, and that it was designed by the Legislature as the ex- 
clusive guide upon that subject, save as provisions of the general 
tax laws are therein referred to and called to the aid of the new 
statute, and to repeal by implication section 836, R. L. 1905, which 
provides for the deduction of debts from credits listed for taxation. 

2. The classification of money and credits for the purposes ot 
taxation held not a violation of the constitution. 

Writ discharged. 
Opinion. 

Relator, a corporation, properly listed its "credits" for taxa- 
tion under and pursuant to chapter 285, Laws 1911, and claimed 
the right to have its debts deducted therefrom under the provisions 
of section 836, R. L. 1905. This claim was duly presented to the 
State Tax Commission in the form of an application for an abate- 
ment, but was not sustained by the commission. The tax was or- 
dered levied for the value of the listed credits as fixed by the as- 
sessor, and relator sued out this writ of certiorari to review the 
actio'n and decision of the commission. 



REPORT OF THE SPECIAL TAX COMMISSION. 307 

It is contended by relator: (1) That the commission erred, to 
the prejudice of relator's legal rights, in refusing to deduct its 
debts from the listed credits; and (2) that, if the act of 1911 be 
construed as repealing by implication section 836, R. L. 1905, pro- 
viding for the deduction, it is unconstitutional and void. 

1. Prior to the passage of chapter 285, Laws 1911, the statute 
here under consideration, it 'had been the uniform policy of the 
State, whether rightfully or otherwise, is not material, to allow 
a deduction of debts from an assessment of taxes upon credits, 
and section 836, R. L. 1905, so providing, has remained substan- 
tially in its present form since 1860. Since that year credits have 
been taxable on the basis of their net value, arrived at by a deduc- 
tion of debts. The substantial question in the case is whether 
that policy was departed from by the act of 1911. The attempt to 
tax credits has never been either successful or entirely satisfac- 
tory, and the statutes providing therefor have been of little value 
as revenue producers. The value of unsecured debts is at most 
uncertain, many being comcededly wholly worthless, and attempts 
of the State to tax them at the rate imposed upon other classes of 
property have resulted in efforts to evade a proper listing and 
more or less laxity on the part of assessors. This situation and 
the generally unsatisfactory operation of prior statutes authorizing 
this class of taxation led the Legislature to attempt an improve- 
ment, and the act under consideration was the result of its labors 
in that behalf. The new statute makes no reference to the deduc- 
tion of debts, and contains no clause or section repealing other 
enactments upon the subject, and the ultimate inquiry upon this 
branch of the case is whether section 836, R. L. 1905, which pro- 
vides for such deductions, was repealed by implication. We have 
given the subject careful consideration and reach the conclusion 
that the question must be answered in the affirmative. 

The new statute contains thirteen sections, all substantially 
original, and covering the entire subject of taxing money and 
credits. It was evidently drawn with care and intended as a com- 
Dlete revision of all prior statutes, and as a departure in point of 
substance and procedure from the former method of such taxation 
In connection with references therein expressly made to sections 
and provisions of prior statutes it presents a comprehensive work- 
able system for the levy and collection of the tax imposed. The first 



208 REPORT OF THE SPECIAL TAX COMMISSION. 

section adopts the definition of "Credits" as found in section 798, 
R. L. 1905, and provides that such credits "shall hereafter be sub- 
ject to an annual tax of three mills on each dollar of the fair cash 
value thereof." All following sections relate to the procedure for 
the assessment and collection of the tax, calling to the aid of the 
act several sections of the Revised Laws of 1905, but making no 
reference directly or indirectly to the question of deductions pro- 
vided for by section 836. The act is .so complete and so fully 
covers the subject as to bring it within the general rule of implied 
repeal of all prior statutes upon the subject which are not expressly 
referred to and made a part of the new law. This rule applies 
though the new statute contains nothing expressly repugnant tc 
some pertinent provisions found in prior statutes. The inquiry is : 
Did the Legislature intend the new statute as the only rule upon 
the subject-matter of the legislation? Nicol v. St. Paul, 80 Minn. 
415. If the present statute had been in the form of amendments 
to former statutes, the situation would be different. In such cases 
no inferences necessarily arise, there being no repugnancy or in- 
consistency between the old and the amended statute, that any 
change in the law was intended except as expressly made. But 
here the new statute is complete in itself, and comes clearly within 
the rule of implied repeal. There can be no serious question but 
that the Legislature intended a modification of the policy of the 
State in respect to this form of taxation. The lawmakers recog- 
nized the difficulties encountered under the old system, and to 
avoid the injustice of taxing credits at the rate imposed upon other 
property, the new system was devised and the tax laid and fixed 
at a very low rate. If there had been any intention to continue 
in force the policy of -allowing the deduction of debts, the rate 
would undoubtedly "not have been changed, and the reduction 
thereof to a minimum is fairly indicative of a purpose, as disclosed 
in section 1, to tax all credits at their fair cash value, without 
reference to debts and obligations of the person listing the same. 
This complete revision of the law brings the statute fairly within 
our decisions holding to the rule of implied repeal. Smith v. 
County, 37 Minn., 535 ; State v. Ry. Co., 40 Minn., 353 ; Ellington 
v. Ry. Co,' 96 Minn, 176; Kelly v. City, 83 Minn, 9; Bunnell's 
Digest, 8927. Though this result leads to a departure of the long- 
settled policy of the State to allow the deduction of debts in taxa- 



REPORT OF THE SPECIAL TAX COMMISSION. 309 

tion of this kind, that policy was at its inception of doubtful merit, 
in that it extended to one class of taxpayers a favor not granted 
to others. It permitted the taxpayer holding credits to deduct his 
debts from the amount of his assessment, and denied the right to 
any owner of other property who was also in debt. In fact, the 
Attorney General expressly disapproved of this policy when first 
adopted. Op. Atty. Gen., 148-150. While both courts and legis- 
latures should hesitate before departing from a long-settled policy 
of the law, the cause for hesitation arises more particularly when 
the departure is from a policy having a sound and substantial basis, 
and not one of doubtful merit, or, to use the language of General 
Cole, in the opinion above referred to, a policy that amounts tq 
''a palpable violation of the constitution." 

Our conclusion therefore upon this branch of the case, is that 
the act of 1911 was intended by the Legislature as a new rule in 
respect to the taxation of money and credits, that the statute is a 
complete revision of prior enactments, and repeals by implication 
section 836. 

2. The further contention that the statute as so construed 
is unconstitutional, because the classification violates section 1 of 
article 9 of the State Constitution, requires no extended discussion. 
We have no doubt, under the amended constitution, that the classi- 
fication ot money and credits for the purposes of taxation is within 
the discretion of the Legislature, and that this act is a fair exer- 
cise thereof. It is not unreasonable, and the nature and character 
of the property suggests the propriety of a separate method for 
its assessment. The question is fully covered by Ins. Co. vs. Mar- 
tin Co., 104 Minn., 179. A further discussion of the question would 
serve no useful purpose, but result only in a repetition of what has 
been said before upon the same general .subject, and we therefor 3 
conclude by holding the objections to the constitutionality of the 
statute not weP taken. 

Writ discharged. 

BROWN, J. 

P. E. Brown, J., ab r ent on account of illness, took no part. 



LAW CREATING WISCONSIN STATE TAX COMMISSION. 

Chapter 380. 

An act to create a permanent tax commission and transferring to 
such commission the powers and duties of the present commis- 
sioner and assistant commissioner of taxation as a State board 
of assessment or otherwise, and making an appropriation 
therefor. 
The people of the State of Wisconsin, represented in Senate and 
Assembly, do enact as follows: 

§ 1. There is hereby created a State board to be designated 
and known as the tax commission, which board shall succeed and 
take the place of the present commissioner and assistant commis- 
sioners of taxation and the present State boards of assessment 
composed of said commissioner and assistant commissioner as 
hereinafter provided. 

§ 2. Said tax commission shall be composed of three commis- 
sioners, who shall be appointed by the Governor Dy and with the 
advice and consent of the Senate. The three persons first to com- 
pose said board shall be appointed within ten days after the 
passage and publication of this act and before the adjournment of 
the present Legislature if practicable. Of such three persons one 
shall be appointed and designated to serve tor a term ending on 
the first Monday in May, 1909, one for a term ending on the first 
Monday in May, 1911, and one for a term ending on the first Mon- 
day in May, 1913, each of said terms to begin upon the qualification 
of the person appointed therefor. Upon the expiration of the 
terms of the three commissioners first to be appointed as aforesaid, 
each succeeding commissioner shall be appointed and shall nold 
his office for the term of eight years, except in the case of a vacancy 
as hereinafter provided, and each commissioner shall hold his of- 
fice until his successor shall have been appointed and qualified. 

§ 3. After the appointment of said first three commissioners 
and except when appointed to fill a vacancy, each commissioner 
shall be appointed on or before the last Monday in February 
during the biennial session of the Legislature next preceding the 
commencement of the term for which he shall be appointed. In 



REPORT OF THE SPECIAL TAX COMMISSION. 311 

case of a vacancy, it shall be filled by appointment by the Gov^ 
ernor for the unexpired portion of the term in which such vacancy 
shall occur, subject to confirmation by the Senate. If such, ap- 
pointment be made when the Legislature is not in regular session, 
the appointee shall Jiold his office until the first Monday of Febru- 
ary in the next biennial session of the Legislature, when, if such 
appointment is not confirmed by the Senate, the office shall be- 
come vacant, and, on or before the last Monday in the same month, 
the Governor, by and with, the advice and consent of the Senate, 
shall appoint a suitable person to fill such vacancy for the re- 
mainder of such term. 

§ 4. The persons to be appointed as members of such commis- 
sion shall be such as are known to possess knowledge of the sub- 
ject of taxation and skill in matters pertaining thereto. So far 
as practicable they shall be so selected that the board will not be 
composed wholly of persons who are members of or affiliated with 
the same political party or organization. No person appointed as 
such commissioner shall hold any other office under the laws of 
this State nor any office under the Government of the United 
States or of any other State. Each such commissioner shall devote 
his entire time to the duties of the office and shall not hold any 
position of trust or profit, engage in any occupation or business 
interfering with or inconsistent with his duties, or serve on or 
under any committee of any political party. 

§ 5. Each commissioner, within thirty days after notice of his 
appointment and before entering upon the discharge of the duties 
of his office, shall take, subscribe and file with the Secretary of 
State the oath of office prescribed by the Constitution of this State. 
Each of said commissioners shall receive an annual salary of five 
thousand dollars, payable in the same manner that salaries of other 
State officers are paid. 

§ 6. The commissioners first appointed under this act, after 
having duly qualified, shall without delay meet at Vne Capitol in 
Madison, and shall thereupon organize and elect one of their num- 
ber as chairman. A majority of said commissioners shall consti- 
tute a quorum for the transaction of the business and the per- 
formance of the duties of the commission. The said commission 
shall be in continuous session and open for the transaction of busi- 
ness every day except Sundays and legal holidays ; and the ses- 



312 REPORT OF THE SPECIAL TAX COMMISSION. 

sions of such commission shall .stand and be deemed to be ad- 
journed from day to day without formal entry thereof upon its 
records. The commission may hold sessions or conduct investiga- 
tions at any place other than the Capitol when deemed necessary 
to facilitate the performance of its duties. 

§ 7. Said commission may appoint a secretary at a salary oi 
not more than two thousand dollars per annum, one clerk at a 
salary of not more than fifteen hundred dollars, one clerk at a sal- 
ary of not more than twelve hundred dollars and one at a 
salary of not more than one thousand dollars, one of which, clerks 
shall be a stenographer. The commission may employ such other 
persons as experts and assistants as may be necessary to perform 
the duties that may be required of the commission and fix theit 
compensation. The secretary shall keep full and correct minutes 
of all hearings, transactions and proceedings of said commission 
and shall perform such other duties as may be required by the 
commission. The commission shall have power to make all need- 
mi rules, not inconsistent with law, for the orderly and methodical 
performance of its duties as a board of assessment or otherwise, 
and for conducting hearings and other proceedings before it. 

§ 8. The commission .shall keep its office at the Capitol and 
shall be provided with suitable rooms, necessary office furniture, 
supplies, stationery, books, periodicals and maps; and all neces- 
sary expenses .shall be audited and paid as other State expenses 
are audited and paid. The commissioners, secretary and clerks, 
and such experts and assistants as may be employed by the com- 
mission shall be entitled to receive from the State their actuai 
necessary expenses while traveling on the business of the commis- 
sion; such expenditures to be sworn to by the party who incurred 
the expense and approved by the chairman of the commission or 
a majority of the members of such commission. 

§ 9. It shall be the duty of the commission, and it shall hav€ 
power and authority : 

(1) To have and exercise general supervision over the admin- 
istration of the assessment and tax laws of the State, over as- 
sessors, boards of review and supervisors of assessment, and over 
county boards in the performance of their duties as county boards 
of assessment, to the end that all assessments of property be 



REPORT OF THE SPECIAL TAX COMMISSION. 313 

made relatively just and equal at true value in substantial com- 
pliance with law. 

(2) To confer with, advise and direct assessors, boards of re 
view, county boards of assessment and supervisors of assessment 
as to their duties under the statutes of the State. 

(3) To direct proceedings, actions and prosecutions to be in- 
stituted to enforce the laws relating to the penalties, liabilities and 
punishment of public officers, persons and officers or agents of 
corporations for failure or neglect to comply with the provisions 
of the statutes governing the return, assessment and taxation ot 
property; and to cause complaints to be made against assessors, 
members of boards of review, supervisors of assessment, and mem- 
bers of county boards, or other assessing or taxing officers, to the 
proper circuit judge for their removal from office for official mis- 
conduct or neglect of duty. 

(4) To require district attorneys to assist in the commence- 
ment and prosecution of actions and proceedings for penalties, for- 
feitures, removals and punishment for violations of the laws of 
the State in respect to the assessment and taxation of property 
in their respective counties. 

(5) To require town, city, village, county and other public of- 
ficers to report information as to the assessment of property, col- 
lection of taxes, receipts from licenses and other sources, the ex- 
penditure of public funds for all purposes, and such other in- 
formation as may be needful in the work of the commission, in 
such form and upon such blanks as the commission may prescribe. 

(6) To require individuals, partnerships, companies, associa- 
tions and corporations to furnish information concerning their cap- 
ital, funded or other debt, current assets and liabilities, value of 
property, earnings, operating and other expenses, taxes and all 
other facts which may be needful to enable the commission to as- 
certain the value and the relative burdens borne by all kinds of 
property in the State. 

(7) To summon witnesses to appear and give testimony, and 
to produce records, books, papers and documents relating to any 
matter which the commission shall have authority to investigate 
or determine. 

(8) To cause the deposition of witnesses residing within or 
without the State or absent therefrom, to be taken, upon notice 



314 REPORT OP THE SPECIAL TAX COMMISSION. 

io the interested party, if any, in like manner that depositions of 
witnesses are taken in civil actions pending in the circuit court, 
in any manner which the commission shall have authority to in- 
vestigate or determine. 

(9) To visit the counties in the State, unless prevented by 
other necessary official duties, for the investigation of the work 
and the methods adopted by local assessors, boards of review, 
supervisors of assessment and county boards, in the assessment, 
equalization and taxation of real and personal property. 

(10) To carefully examine into all cases where evasion or vio- 
lation of the laws for assessment and taxation of property is al- 
leged, complained of or discovered, and to ascertain wherein exist- 
ing laws are defective or are improperly or negligently adminis- 
tered. 

(11) To investigate the tax systems of other States and coun- 
tries and to formulate and recommend such legislation as may b; 
deemed expedient to prevent evasion of assessment and tax laws 
and to secure just and equal taxation and improvement in the sys- 
tem of taxation in the State. 

(12) To inquire into the system of accounting af public funds 
in use in towns, cities, villages and counties, and to devise and 
prescribe a uniform system of accounting of the receipts and dis- 
bursements of public funds in the municipalities of the State. 

(13) To consult and confer with the Governor of the State 
upon the subject of taxation, the administration of the laws in re- 
lation thereto and the progress of the work of the commission, and 
to furnish the Governor from time to time such assistance and 
information as he may require. 

(14) To transmit to the Governor and to each member of the 
Legislature, thirty days before the meeting of the Legislature, the 
report of the commission showing all the taxable property in the 
State and the value of the same in tabulated form with recom- 
mendations for improvement in the system of taxation in the State, 
together with such measures as may be formulated for the con- 
sideration of the Legislature. 

(15) To exercise and perform such further powers and duties 
as may be granted to or imposed upon the commission by law. 

§ 10. Oaths to witnesses in any matter under the investiga- 
tion or consideration of the commission may be administered by 



REPORT OF THE SPECIAL TAX COMMISSION. 315 

the secretary of the commission or by any member thereof. In 
case any witness shall fail to obey any summons to appear before 
said commission or shall refuse to testify or answer any material 
question or to produce records, books, papers or documents where 
required so to do, such failure or refusal shall be reported to the 
Attorney General, who shall thereupon institute proceedings in 
the proper circuit court to compel obedience to any summons or 
order of the commission or to punish witnesses for any such 
neglect or refusal. Any person who shall testify falsely in any 
material matter under the consideration of the commission shall 
be guilty of and punished for perjury. In the discretion of the 
commission, officers who serve summons or subpoenas, and wit- 
nesses attending, shall receive like compensation as officers and 
witnesses in the circuit court. 

§ 11. The said commission, upon the qualification of its mem- 
bers and the organization thereof as hereinbefore provided, shall 
become successors in office to the present commissioner and as- 
sistant commissioners of taxation, and thereupon all the power 
and authority vested in or conferred upon said last named officers 
or any of them, and all duties imposed upon them, or any of them, 
by any act or statute then in force or by any act thereafter taking 
effect, passed at this legislative .session, shall devolve upon and 
thenceforth be exercised and performed by said commission, and 
the office of commissioner of taxation and of the first and second 
assistant commissioners of taxation shall cease and terminate. 

§ 12. The power and authority and the duties which shaU 
devolve upon and be exercised and performed by said commission 
as provided in the preceding section, shall extend to and include 
all those conferred or imposed upon said commissioner and as- 
sistant commissioners of taxation as a State board of assessment 
or taxing board for any purpose by any act or statute which shall 
be in force at the time of the organization of said commission and 
termination of said offices of commissioners and assistant commis- 
sioners of taxation, or by any act thereafter taking effect passed 
at this legislative session, and shall include the power and au- 
thority of said commissioner and assistant commissioners as a 
State board for the assessment and taxation of the property of 
railroad companies under the provisions of chapter 315 of the 
Laws of 1903 and acts amendatory thereof. All proceedings, hear- 



316 REPORT OF THE SPECIAL TAX COMMISSION. 

ings or other matters then pending before said commissioner and 
assistant commissioners, as a State board of assessment or other- 
wise, and all investigations or other official work undertaken by 
them or any of them and then remaining uncompleted, shall be 
continued, carried on and completed by and before said commis- 
sion. All records, books, papers, documents and memoranda and 
all office equipment, materials and supplies in the official custody 
or possession of said commissioner and assistant commissioners 
of taxation or of any of them, as a State board of assessment or 
otherwise, upon the termination of their offices as above provided 
shall be transferred to said commission as their successors in of- 
fice for all purposes, and said commission shall thereupon and 
thenceforth have official possession and custody of the same. 

§ 13. There is hereby annually appropriated out of the gen- 
eral fund in the State treasury a sum sufficient to carry out the 
provisions of this act. 

§ 14. This act shall take effect and be in force from and after 
its passage and publication. 

Approved June 15, 1905. 

Note. 

Reference is made to the following acts as affecting and en- 
larging the powers of the tax commission in regard to special sub- 
jects : 

Chapters 111, 112, 113 and 114, Laws of 1899, chapter 35, Laws 
ef 1903, and chapter 477, Laws of 1905, relating to the taxation o»i 
express, sleeping car, freight line and equipment companies and 
their assessment by the tax commission; 

Chapter 237, Laws of 1901, making the commission a State 
board of assessment to assess the general property of the State; 

Chapter 315, Laws of 1903, and chapter 216, Laws of 1905, re- 
lating to the taxation of railroads and their assessment by the 
commission; 

Chapter 259, Laws of 1905, authorizing the commission to 
order a reassessment in assessment districts ; 

Chapter 474, Laws of 1905, authorizing the tax commission to 
review the assessment made by county boards; 

Chapter 493, Laws of 1905, for the taxation of street railways 
and their assessment by the commission, and 

Chapter 494, Laws of 1905, for the taxation of telegraph and 
telephone companies and their assessment by the commission,, 



THE NEW YORK TAX ON MORTGAGES. 

Statutory Provisions. 

§ 250. Definitions— The words "real property" and "real es- 
tate" as used in this article, in addition to the definition thereof 
contained in section two of this chapter, shall be understood to 
include everything a conveyance or mortgage of which can be 
recorded as a conveyance or mortgage of real property under the 
laws of the State. The words "mortgage of real property" as used 
in this article include every mortgage by which a lien is created 
over or imposed on real property or which affects the title to real 
property, notwithstanding that it may also be a lien on personal 
or other property or that personal or other property may form a 
part of the security for the debt or debts secured by such mort- 
gage. Executory contracts for the sale of real property under 
which the vendee has or is entitled to possession shall be deemed 
to be mortgages for the purposes of this article and shall be as- 
sessed at the amount unpaid on such contracts. A. contract or 
agreement by which the indebtedness secured by any mortgage 
is increased or added to shall be deemed a mortgage of real prop- 
erty for the purpose of .this article, and shall be taxable as such 
upon the amount of such increase or addition. 

§ 251. Exemption from local taxation — All mortgages of real 
property situated within the State which are taxed by this article 
and the debts and the obligations which they secure, together with 
the paper writings evidencing the same, shall be exempt from 
Other taxation by the State, counties, cities, towns, villages, school 
districts and other local subdivisions o'f the State, except that such 
mortgage shall not be exempt from the taxes imposed by sections 
twenty-four, one hundred and eighty-seven, one hundred and 
eighty-eight, one hundred and eighty-nine and article ten of this 
chapter; but the exemption conferred by this section shall not be 
construed to impair or in any manner affect the title of any pur- 
chaser of land or real estate which may be sold for non-payment 
of taxes levied by any local authority. 

§ 252. Exemptions — No mortgage of real property situated 
within this State shall be exempt, and no person or corporations 



318 REPORT OF THE SPECIAL TAX COMMISSION. 

owning any debt or obligation secured by mortgage of real prop* 
erty situated within this State shall be exempt from the taxes im- 
posed by this article by reason of anything contained in any other 
statute, or by reason of any provision in any private act or charter 
which is subject to amendment or repeal by the Legislature, or 
by reason of non-residence within this State or for any other 
cause. 

§ 253. Recording tax — A tax of fifty cents for each one hun- 
dred dollars and each remaining major fraction thereof of prin- 
cipal debt or obligation which is, or under any contingency may 
be secured at the date of the execution thereof or at any time there- 
after by mortgage on real property situated within the State re- 
corded on or after the first day of July, nineteen hundred and six, is 
hereby imposed on each such mortgage, and shall be collected 
and paid as provided in this article. If the principal debt or obli- 
gation which is or by any contingency may be secured by such 
mortgage recorded on or after the first day of July, nineteen hun- 
dred and seven, is less than one hundred dollars, a tax of fifty 
cents is hereby imposed on such mortgage, and shall be collected 
and paid as provided in this article. 

§ 254. Optional tax on prior mortgages — Whenever any mort- 
gage other than a mortgage specified in section two hundred and 
sixty-four has been recorded prior to July first, nineteen hundred 
and six, the record owner thereof may file with the recording of- 
ficer of the county in w r hich the real property, or any part thereof, 
on which said mortgage is a lien, is situated, a written statement 
under oath verified by the record owner. or the agent or officer of 
such record owner describing such mortgage by giving the date 
of the same and the liber and page of the record thereof, together 
with the names of the parties thereto, specifying the amount then 
remaining unpaid on the debt or obligation secured thereby, and 
electing that it ;shall become subject to the tax prescribed by sec- 
tion two hundred and fifty-three of this chapter. Whenever any 
unrecorded mortgage has been executed and delivered prior to 
July first, nineteen hundred and six, the owner thereof may record 
the same upon filing with the recording officer a similar statement 
and paying the tax as herein prescribed. A tax shall thereupon 
be computed, levied and collected upon the amount of the principal 
debt or obligation unpaid at the time of the filing of such state- 



REPORT OF THE SPECIAL TAX COMMISSION. 319 

ment, or of the recording of such mortgage and filing of such state- 
ment. On the payment of such tax as herein provided, the record- 
ing officer shall note on the margin of the record of .such mortgage 
the fact of such statement and of the amount of the tax paid, at- 
tested by his signature, whereupon such mortgage and the debt 
or obligation secured thereby shall be entitled to the exemptions 
and immunities conferred by this article, and all of the provisions 
of this article shall thereafter be applicable to said mortgage. 
Whenever the original mortgage is presented to the clerk together 
with the statement he shall also note on said original mortgage 

the fact of the filing- uf the said statement and also the amount of 

* 
the tax paid duly attested by his signature, which indorsement 

shall be conclusive evidence of the payment of such tax. 

§ 255. Supplemental mortgages — If, subsequent to the record- 
ing of a mortgage on which all taxes, if any, accrued under this 
article have been paid, a supplemental instrument or mortgage is 
recorded for the purpose of correcting or perfecting any recorded 
mortgage, or pursuant to some provision or covenant therein, or 
an additional mortgage is recorded imposing the lien thereof upon 
property not originally covered by or not described in such recorder 
primary mortgage for the purpose of securing the principal in- 
debtedness which is or under any contingenc)' may be secured 
by such recorded primary mortgage, such additional instrument 
or mortgage shall be subject to taxation under this article, unless 
it creates or secures a new or further indebtedness or obligation 
other than the principal indebtedness or obligation secured by or 
which under any contingency may be secured by the recorded pri- 
mary mortgage, in which case, a tax is imposed as provided by 
section two hundred and fifty-three of this chapter on such new 
or further indebtedness or obligation, and shall be paid to the 
proper recording officer at the time such instrument or additional 
mortgage is recorded. If at the time of recording such instrument 
or additional mortgage any exemption is claimed under this sec- 
tion, there shall be filed with the recording officer and preserved 
in his office a statement under oath of the facts on which such 
claim for exemption is based. The determination of the recording 
officer upon the question of exemption shall be reviewable by 
the State Board of Tax Commissioners. 



320 REPORT OF THE SPECIAL TAX COMMISSION. 

§ 256. Mortgages for indefinite amounts or for contract obliga- 
tions — If the principal indebtedness secured -or which by any con- 
tingency may be secured by a mortgage is not determinable from 
the terms of the mortgage, or if a mortgage is given to secure the 
performance by the mortgagor or any other person of a contract 
obligation other than the .payment of a specific sum of money and 
the maximum amount secured or which by any contingency may 
be secured by the mortgage is not expressed therein, such mort- 
gage shall be taxable under section 253 of this chapter upon the 
value of the property covered by the mortgage, which shall be 
determined by the recording officer to whom such mortgage is pre- 
sented for record, unless at the time of presenting such mortgage 
for record the owner thereof shall file with the recording officer 
a sworn statement of the maximum amount secured or which 
under any contingency may be secured by the mortgage. If such 
maximum amount is expressed in the mortgage or in a sworn 
statement filed as required by this section, such amount shall be 
the basis for assessing the tax imposed by this article. A state- 
ment filed by the owner of a mortgage pursuant to this section 
shall thereafter at all times be binding upon and conclusive against 
such owner, the holders of any bonds or obligations secured by 
such mortgage and all persons claiming through the mortgagee 
any interest in the mortgage or the mortgaged premises. If the 
maximum amount secured or which by any contingency may be 
secured by the mortgage is not expressed in the mortgage or in 
a sworn statement is authorized by this section, the recording of- 
ficer at the time such mortgage is offered 'for record may require 
the mortgagor or mortgagee to furnish him with proofs as to such 
facts as he deems necessary for the purpose of computing the 
value of the property covered by the mortgage, and such proofs 
shall be preserved in his office. His determination as to the basis 
for computing the tax on such mortgage shall be subject to re- 
view by the State Board of Tax Commissioners. 

§ 257. Payment of taxes — The taxes imposed by this article 
shall be payable on the recording of each mortgage of real prop' 
erty subject to taxes thereunder. Such taxes shall be paid to the 
recording officer of any county in which the real property or any 
part thereof is situated. It shall be the duty of such recording 
officer to indorse upon each mortgage a receipt for the amount 



REPORT OF THE SPECIAL TAX COMMISSION. 321 

of the tax so paid. Any mortgage so indorsed may thereupon or 
thereafter be recorded by any recording officer and the receipt for 
such tax indorsed upon each mortgage shall be recorded therewith. 
The record o'f such receipt shall be conclusive proof that the 
amount of tax stated therein has been paid upon such mortgage. 

§ 258. Effect of non-payment of taxes— No mortgage of real 
property shall be recorded by any county clerk or register unless 
there shall be paid the tax imposed by and as in this article pro- 
vided. No mortgage of real property which is subject to the taxes 
imposed by this article shall be released, discharged of record or 
received in evidence in any action or proceeding, nor shall any 
assignment of or agreement extending any such mortgage be re- 
corded unless the taxes imposed thereon by this article shall have 
been paid as provided in this article. No judgment or final order 
in any action or proceeding shall be made for the foreclosure or 
enforcement of any mortgage which is subject to the taxes im- 
posed by this article or of any debt or obligation secured by or 
which secures any such mortgage, unless the taxes imposed by 
this article shall have been paid as provided in this article. 

§ 259. Trust mortgages — In the case of mortgages made by 
corporations in trust to secure payment of bonds or obligations 
issued or to be issued thereafter, if the total amount of principal, 
indebtedness which under any contingency may be advanced or 
accrue or which may become secured by any such mortgage which 
is subject to this article has not been advanced or accrued thereon 
or become secured thereby before such mortgage is recorded, it 
may contain at the end thereof a statement o'f the amount which 
at the time of the execution and delivery thereof has been ad- 
vanced or accrued thereon, or which is then secured by such mort- 
gage; thereupon the tax payable on the recording of the mort- 
gage shall be computed on the basis of the amount so stated to 
have been so advanced or accrued thereon or which is stated to 
be secured thereby. Such statement shall thereafter at all times 
be binding upon and conclusive against the mortgages, the holders 
of any bonds or obligations secured by such mortgage and all per- 
sons claiming through the mortgagee any interest in the mortgage 
or in the mortgaged premises. Whenever a further amount is to 
be advanced under the original mortgage, or shall accrue thereon 
or become secured thereby, the corporation making such mort- 

11— 



322 REPORT OF THE SPECIAL TAX COMMISSION. 

gage shall, at or before the time when such amount is to be ad- 
vanced, accrues or becomes secured, file in the office of the record- 
ing officer where such mortgage has been or is first recorded a 
statement, verified by the secretary, treasurer or other proper of- 
ficer of said corporation of the amount of principal indebtedness 
to be so advanced, accruing or becoming secured, and the tax on 
such amount shall become due and payable at the time of filing 
such statement. Such additional tax shall be paid to the recording 
officer where such mortgage has been or is first recorded and a re- 
ceipt therefor shall be indorsed upon the mortgage and payment 
therefor shall be noted in the margin of the record of such mort- 
gage, and if requested a duplicate receipt for such payment shall 
also be given to the party paying such tax and the note of such 
payment or additional payment or such receipt shall have the same 
force and effect as the record of receipt of the tax which under 
this article is payable at or before the recording of the mortgage. 
If such additional tax is not paid as required by this section, the 
trust mortgagee shall not certify any bond or other obligation is- 
sued, on account thereof. The corporation making such mortgage 
or the owner of the property which secures the mortgage debt 
shall annually within thirty days after July first, and until it shall 
appear by such statement that the maximum amount of principal 
indebtedness secured by such mortgage has been advanced, has 
accrued or become secured and the tax thereon paid, file in the 
offices of the State Board of Tax Commissioners and the recording 
officer where such mortgage has been or is first recorded, a state- 
ment, verified by the secretary, treasurer or other officer of said 
corporation, showing: 

1. The name of the mortgagor or mortgagee; 

2. The date of the mortgage and the county where first re- 
corded; 

3. The maximum amount of principal debt or obligation which 
under any contingency may be secured by such mortgage; 

4. The amount advanced on such mortgage during the year 
ending June thirtieth preceding, with the date and the amount of 
each advancement; 

5. In the case o>f a mortgage recorded prior to July first, nine- 
teen hundred and six, the first annual statement filed under this 
section, as hereby amended, shall state the total amount advanced 



REPORT OF THE SPECIAL TAX COMMISSION. 323 

prior to July first, nineteen hundred and six, and the date and the 
amount of each subsequent advancement to the end of the period 
covered by the statement. 

A failure to file any statement required by this section within 
the time required shall subject the corporation making such mort- 
gage to a penalty of one hundred dollars per day for each day 
such failure continues, recoverable by the Attorney General in an 
action brought in the name of the people of the State of New 
York. (Thus amended by L. 1909, chapter 412, in effect May 20, 
1909.) 

§ 260. Relates to apportionment between State and localities. 

§ 261. Payment over and distribution of taxes. 

§ 262. Expenses of officers. 

§ 263. Supervisory power of State Board of Tax Commis- 
sioners and State Comptroller. 

§ 264. Tax on prior advance mortgages. 

§ 265. Tax a lien; exceptions. 

§ 266. Enforcement; procedure. 

§ 267. Idem; where recovery is had against trust mortgagee. 

This tax yielded in 1912 $3,769,316.86. 



REPORT OF NATIONAL 
TAX ASSOCIATION. 



REPORT OF NATIONAL TAX ASSOCIATION. 

In 1911 a committee of the National Tax Association, especially 
appointed to consider and report on Practical Substitutes for Per- 
sonal Property Tax, reported among other things as follows: 

a. Taxation of intangible personal property. 

The attempt to tax all property annually at a uniform rate upon 
its value and by assessment of its owner has broken down most 
completely in the case of intangible property, i. e., the evidences 
of ownership of tangible real or personal property such as shares 
of stock, bonds, notes, mortgages, credits. This breakdown is ad- 
mitted by both the defenders and opponents of the general prop- 
erty tax. No less than three substitutes have been tried for the 
tax on intangible personalty. Two of these were first applied in 
New York. The first method is known as the Mortgage Recording 
Tax. It is a tax of one-half of one per cent., based on the face 
value of mortgages of real property in the State, and must be 
paid before the mortgage can be placed on record. The payment 
of this tax exempts the mortgage and any bonds secured thereby 
from taxation in the hands of the holder. This method has been 
copied in Minnesota, Alabama and Michigan. It has been found 
to afford a considerable revenue collected cheaply, with certainty 
and impartiality. It does not depend upon the vigilance of the 
local assessor or the conscience of the taxpayer. 

The second plan, recently adopted by the State of New York, 
extends this idea so that owners of bonds and securities which 
do not come under the mortgage recording tax may present them 
to the State Comptroller, and by paying a tax of one-half of one 
per cent, upon the face value, secure exemption from personal 
property assessment. This tax is admitted to be a compromise, 
intended to secure a fair and definite revenue, in exchange for an 
exemption from liability to the unequal and unfair personal prop^ 
erty assessment. It might be termed the registry tax. 

Somewhat similar is the plan adopted in Connecticut several 
years ago, whereby a specific tax paid to the State exempts the 
security from local taxation for five years. This plan and the New 
York security or registry tax in lesser degree have something ol 



328 REPORT OF THE SPECIAL TAX COMMISSION. 

a disadvantage in that they do not provide a positive method for 
reaching the security. The State tax is optional, and its collec- 
tion depends on the efficacy of the threat that if unpaid the local 
assessor will catch the security holder for a much higher tax. A« 
compared with this, the recording tax is both positive and auto- 
matically enforceable. 

The recording and the registry tax will between them reach 
the greater part of intangible personalty. They will provide a 
fair revenue — much larger than that now secured from intangible 
personalty — without hardship, and without the gross inequalities 
inseparable from the ordinary personal property assessment. 

With respect to the mortgage recording tax it should be pointed 
out that the tax is generally paid by the borrowers. This, how- 
ever, is also true of other forms of mortgage taxation. 

In recommending the recording and registry tax your commit- 
tee consider it necessary to call attention to the desirability of ad- 
justing the amount of the tax to the length of the period for which 
exemption from other taxation is granted. The objection has been 
made to the laws now in force in some of the States, that the tax 
is paid once and for all, and the amount is fixed without regard to 
the period of exemption. Your committee recognizes that in New 
York conditions may be exceptional, so that the objection loses 
force; but they believe that in the majority of States the record- 
ing and registry tax should not be payable once and for all, but 
should be adjusted either as is now done in Connecticut, to some 
limited period of exemption, or through the imposition of a higher 
rate, to the life of the security. 

The third method, which is that followed in Pennsylvania and 
Maryland, and more recently introduced in Minnesota and Iowa, 
may be called the classified tax. It is the plan of taxing intangible 
personalty annually at a fixed rate uniform throughout the State, 
lower than imposed on other classes of property. This possesses 
the advantage of an annual levy. 

Your committee, while recommending this plan, consider it 
important to point out that the lower rate of taxation for in- 
tangible property does not meet all the needs of the case. While 
such lower rate may be a mitigation of the hardships of the gen- 
eral property tax, and will tend to increase the willingness of tax- 
payers to return such property for taxation, the plan will not pro- 



REPORT OF THE SPECIAL TAX COMMISSION. 329 

duce thoroughly satisfactory results if the enforcement is left 
wholly to local boards of assessors. It is necessary to supplement 
the lower rate by effective State supervision of the work of assess- 
ment, as Minnesota has done; and the committee accordingly rec- 
ommends that States considering the adoption of this substitute 
for the existing tax on intangibles should not fail to provide also 
methods of administration that will make rigorous enforcement 
possible. 

Summing up, your committee believe that the Special Securi- 
ties Tax, as we should like to call it, whether in the form of the 
recording, the registry or the classified tax, either separately or 
in combination, constitutes a practicable substitute for the tax on 
intangible personalty. 

The remainder of the report -has to do with the taxation of 
"Tangible Personal Property" and so not in point here. 

This report was signed by: 

Edwin R. A. Seligman, Chairman, Professor of Economics, 
Columbia University, New York; T. S. Adams, member of State 
Tax Commission, Madison, Wis. ; Charles J. Bullock, Professor 
of Economics, Harvard University, Cambridge, Mass.; J. W. Har- 
ris, Assessment Commissioner, Winnipeg, Manitoba; Nils P. 
Haugen, Chairman State Tax Commission, Madison, Wis. ; Erank 
L. McVey, President University of North Dakota, Grand Forks, 
N. D., and formerly Chairman of the Minnesota Tax Commis- 
sion; Arthur C. Pleydell, Secretary National Tax Association, 
North Plainfield, N. J. 

CONNECTICUT. CHOSE IN ACTION TAX. 

r — ; 

Statutory Provisions. 

§2325. Payment to State Treasurer of tax on choses in action — 

Any person may take or send to the office of the Treasurer of 
this State any bond, note or other chose in action, or a description 
of the same, and may pay to the State a tax of two per centum 
on the face amount thereof for five years or, at the option of such 
person, for a greater or less number of years at the same rate, 
under such regulations as the Treasurer may prescribe, and the 
Treasurer shall thereupon make an indorsement upon said bond, 
note or other chose in action, or shall give a receipt for the tax 



330 REPORT OF THE SPECIAL TAX COMMISSION. 

thereon, describing said bond, note or other chose in action, certi- 
fying that the same is exempt from all taxation for the period of 
five years, or for such longer or shorter period for which a pro- 
portionate tax has been paid, which indorsement or receipt shall 
be duly dated and signed in the name of the Treasurer and with 
the seal of the Treasurer affixed. Said Treasurer shall keep a rec- 
ord of such indorsements and receipts with a description of such 
bonds, notes or other choses in action, together with the name 
and address of the party presenting the same and date of regis- 
tration ; and said Treasurer shall, annually, on or before the tenth 
day of November, mail to the town clerk of each town a general 
description of all such bonds, notes or other choses in action so 
registered before the first day of the October last preceding by 
persons residing in such town, and the date and period of such 
registration, and the names of the persons by whom the same were 
registered; and all bonds, notes or other choses in action so in- 
dorsed or described in such a receipt shall be exempt from all 
taxation in the State during the period for which said tax is so 
paid. 

Enacted in 1889, rate 2 mills. Amended 1897, rate 4 mills. 

On this section the Tax Commission makes the following com- 
ment: 

Report of the Tax Commission, 1911-1912. -• 

The present statute permits the registration of choses in action 
in the Treasurer's office by the bearer, and does not require the 
owner's name to appear on the records in that office, nor to be 
sent to the town clerk of the town in which the owner resides. It 
is customary for banks and trust companies to pay the tax on a 
large amount of securities owned by their different clients; the 
registration of the same being in the name of the company instead 
of in the name of the individual owner. 

Section 2325 requires the State Treasurer to send to the town 
clerks before November 10 a list of choses in action so registered 
with the name of the bearer but not of the owner. 

This makes it difficult for the assessors to check the taxation 
of bonds under this procedure in the name of the owner. 






Number of 


Amount of 




Notes, etc. 


Notes, etc. 


Tax. 


35,028 


$38,159,815.75 


$160,625.91 


35,260 


37,046,708.39 


161,780.36 


37,555 


40,993,148.95 


167,796.03 


36,859 


39,271,309.94 


159,720.20 


37,462 


40,107,886.05 


161,385.25 



REPORT OF THE SPECIAL TAX COMMISSION. 331 

Receipts From Tax on Choses in Action Paid to the State Treasurer 
With Number and Total Valuation of Notes, Bonds, Etc. 

Fiscal Year Ended Rate. 

1908 4 mills 

1909 4 mills 

1910 4 mills 

1911 4 mills 

1912 4 mills 

: THE NEW YORK TAX ON SECURED DEBTS. I 

i 
Statutory Provisions. ■ 

§ 330. Definitions — The words "secured debts," as used in this 
article, shall include: 

(1) Any bond, notes or debt secured by mortgage of real prop- 
erty recorded in any State or country other than New York and 
not recorded in the State of New York; 

(2) Any and all bonds, notes or written or printed obligations, 
forming a part of a series of similar bonds, notes or obligations, the 
payment of which is secured by a mortgage or deed of trust of 
real or personal property, or both, which mortgage or deed of trust 
is recorded in some place outside of the State of New York, and 
not recorded in the State of New York; 

(3) Any and all bonds, notes or written or printed obligations, 
forming part of a series of similar bonds, notes or obligations, 
which are secured by the deposit of any valuable securities, as 
collateral security for the payment of such bonds, notes or obliga- 
tions, under a deed of trust or collateral agreement held by a 
trustee ; 

(4) Any bonds, debentures or notes, 'forming part of a series 
of similar bonds, debentures or notes, which by their terms are 
not payable within one year from their date of issue and which 
are not issued for an amount exceeding one thousand dollars for 
each bond, debenture or note, and the payment of which is not 
secured by the deposit or pledge of any collateral security. The 
term "secured debts" as used in this article shall not include se- 
curities held as collateral to secure the payment of bonds taxable 
under this article or under article eleven of this chapter. (Added 
by Law 1911, chapter 802, in effect September 1, 1911.) 



332 REPORT OF THE SPECIAL TAX COMMISSION. 

§ 331. Payment of tax on secured debt — Any person may take 
or send to the office of the Comptroller of this State any secured 
debt or a description of the same, and may pay to the State a tax 
of one-half per centum on the face value thereof, under such regu- 
lations as the comptroller may prescribe, and the comptroller 
shall thereupon make an indorsement upon said secured debt or 
shall give a receipt for the tax thereon, describing said secured debt 
and certifying that the same is exempt from taxation, which in- 
dorsement or receipt shall be duly signed and dated by the 
comptroller or his duly authorized representative. The comptrol- 
ler shall keep a record of such indorsements and receipts with a 
description of such secured debt, together with the name and ad- 
dress of the person presenting the same and the date of registra- 
tion. All secured debts so indorsed or described in such receipt 
shall thereafter be exempt from all taxation in the State or any 
of the municipalities or local divisions of the State except as pro- 
vided in sections twenty-four, one hundred and eighty-seven, one 
hundred and eighty-eight, one hundred and eighty-nine of this 
chapter, and in articles ten and twelve of this chapter. (Added 
by Law 1911, chapter 802, in effect September 1, 1911.) 

§ 332. Stamps — How prepared and used — Adhesive stamps for 
the purpose of paying the tax provided for by this article shall be 
prepared by the comptroller, in such form and of such denomina- 
tions and in such quantities as he may from time to time prescribe 
Upon the payment of the tax provided by this article upon any 
secured debt the comptroller shall affix stamps of the proper de- 
nominations, equal in face value to the amount of tax paid, to the 
secured debt or to the receipt for the tax, and shall cancel the 
same by the seal of his office or by such other cancelling device 
as he may prescribe. (Added by Law 1911, chapter 802, in ef- 
fect September 1, 1911.) 

§ 333. No exemption unless stamps are affixed and cancelled — 

The payment of the tax upon any secured debt, as provided in this 
article, shall not exempt such secured debt from taxation, as pro- 
vided in section three hundred and thirty-one, unless stamps to 
the proper amount are affixed and cancelled, as provided in the pre- 
ceding section. (Added by Law 1911, chapter 802, in effect Sep- 
tember 1, 1911.) 



REPORT OF THE SPECIAL TAX COMMISSION. 333 

§ 334. Contracts for dies— New York City office — Expenses — 
How paid. 

§ 335. Illegal use of stamps— Penalty — Any person who shall 
wilfully remove or cause to be removed, alter or cause to be al- 
tered the cancelling or defacing. marks of any adhesive stamp pro- 
vided for by this article with intent to use the same or to cause 
the use of the same after it shall have been used or shall know- 
ingly or wilfully sell or buy any washed or restored stamp, or 
offer the same for sale, or give or. expose the same to any person 
for use, or knowingly use the same or prepare the same with in- 
tent for the further use thereof, or shall wilfully use any counter- 
feit stamp or any forged stamp with intent to defraud the State 
of New York, shall be guilty of a misdemeanor and on conviction 
thereof shall be liable to a fine of not less than five hundred nor 
more than one thousand dollars, or be imprisoned for not more 
than six months, or by both such fine and imprisonment, at the 
discretion of the court. (Added by Law 1911, chapter 802, in ef- 
fect September 1, 1911.) 

§ 336. No deduction of debts against taxable debt — The 
owner of any secured debt, on which the tax provided for in this 
article has not been paid, shall be assessed upon such secured debt 
in the taxing district in which he resides, upon the fair market 
value of such secured debt and no deduction for the just debts 
owing by him shall be allowed against the assessed value of such 
secured debt, as provided in section twenty-one of this chapter or 
elsewhere in this chapter or in any other law of this State. (Added 
by Law 1911, chapter 802, in effect September 1, 1911.) 

§ 337. Application of taxes — The taxes imposed under this 
article and the revenues thereof shall be paid by the State 
Comptroller into the State Treasury and be applicable to the gen- 
eral fund, and to the payment of all claims and demands which 
are a lawful charge thereon. (Added by Law 1911, chapter 802, 
in effect September 1, 1911.) 

This tax yielded in 1912, the first year of its collection, 
$1,852,324.45. 



334 REPORT OF THE SPECIAL TAX COMMISSION. 

AN OUTLINE OF THE STATE TAX COMMISSIONS AND 

SIMILAR BOARDS IN DIFFERENT STATES. 
Tax Commissions. 

Nearly twenty States, including most of the more important 
States, have established a permanent tax commission, or commis- 
sioner, with larger powers than the boards of equalization and as- 
sessment. These tax commissioners usually value and assess cer- 
tain classes of corporate property, and also have considerable 
powers of supervision over local assessors and authority to in- 
vestigate the general system of taxation, and sometimes the power 
of equalizing local valuations. 

Massachusetts, Connecticut, Vermont and Maryland have each 
had a single salaried tax commissioner for a number of years; in 
1904 West Virginia, and in 1909 Wyoming, established a similar 
office. Boards of tax commissioners have been established within 
the past twenty-five years in Indiana (1891), New York (1896), 
Michigan and Wisconsin (1899), New Jersey, Texas and Wash- 
ington (1905), Minnesota, Kansas and Alabama (1907), Arkansas 
and Oregon (1909), and Ohio (1910). These boards of tax com- 
missioners are in most instances composed of three members, each 
receiving a salary of from $2,500 (in Michigan and Kansas) to 
$4,500 in Minnesota, and $5,000 in New York, Ohio and Wisconsin. 

In the States where permanent tax commissions have recently 
been established, there has been a notable improvement in the ad- 
ministration of the tax laws. The assessed valuations have been 

markedly increased, from 50 per cent, (in Indiana) to three-fold 
(in Michigan), and even six-fold (in Kansas) ; while by confer- 
ences with county officials and personal visits to the different parts 
of the State, the tax commissioners have secured a more equal as- 
sessment. 

TABLE 35. ! I i ' 

PERMANENT STATE TAX COMMISSIONS. 

Number of Annual 

State. Members. How Chosen. Salary. 

Massachusetts l Appointed by Governor and Council for 

three years $5,000 

Connecticut 1 Appointed by Governor and Senate for 

four years 3,000 

Vermont .-—-.— . u .l Appointed by Governor and Senate for 1 

two years •• 



REPORT OP THE SPECIAL TAX COMMISSION. 



335 



New York 3 

New Jersey 5 

Maryland 1 

North Carolina o 

Alabama 3 

West Virginia 1 

Ohio -.3 

Indiana 3 

Michigan 3 

Wisconsin 3 

Minnesota 3 

Kansas 3 

Wyoming 1 

Washington 3 

Oregon 2 

♦CI- airman, $5,000. 



Appointed by Governor for three years — 5,000 
Appointed by Governor and Senate for five 

years *3,500 

Appointed for four years 2,500 

Elected by popular vote for six years' 3,000 

Appointed by Governor for four years $2,400 

Appointed by Governor and Senate for 

six years 4,000 

Appointed by Governor and Senate for 

three years 5,000 

Appointed by Governor for four years 3>000 

Appointed by Governor and Senate for six 

years 2,500 

Appointed by 'Governor and Senate for 

eight years 5,001 

Appointed by Governor and Senate for six 

years* 4,500 

Appointed by Governor and iSenate for 

four years 2,500 

Appointed iby Governor and Senate for 

two years 2,500 

Appointed by Governor and Senate for 

four years 3,000 

Appointed, and three ex-officio, for four 

years 2,500 

^Chairman, $3,000. 



Maine. 

The Board of State Assessors consists of three members ap- 
pointed for a term of six years — one member every two years. 
This board has powers of supervision over local assessors and of 
investigation of local assessments; it acts as a board of equaliza- 
tion; and it administers the law as to the taxation of corporations. 

New Hampshire. 

The State Board of Equalization consists of five members ap- 
pointed by the Supreme Court and commissioned by the Gov- 
ernor. It acts as a board of equalization and also as a board oi 
assessment for corporate taxes in the case of railroad, sleeping, 
dining and parlor car, telegraph, telephone and express companies. 



Vermont. 

There is no equalization and no active supervision over local 
assessors. The Commissioner of State Taxes, appointed biennially 



336 REPORT OF THE SPECIAL TAX COMMISSION. 

by the Governor and Senate, administers the State taxes on cor- 
porations. 

Massachusetts. 

The State Tax Commissioner, who is also Commissioner of 
Corporations, is appointed by the Governor for a term of three 
years. He reports to the general court (the State Legislature) 
on equalization and apportionment of State and county taxes in 
cities and towns, and also administers the State corporation taxes. 
By Act of 1908, the Tax Commissioner appoints three supervisors 
to aid local assessors in ascertaining valuations. 

■,.'.,. :-;:. I 

Rhode Island. 

There is no provision for equalization; but any person aggrieved 
by assessment may petition the Supreme Court for relief. Certain 
special corporation taxes are paid to the State Treasurer, elected 
each year. There is a tax commission of three members established 
in 1913. 

Connecticut. 

The State Board of Equalization consists of the Treasurer, 
Comptroller and Tax Commissioner. The State Tax Commissioner, 
who administers the taxes on corporations, is appointed by the 
Governor for a term of four years. 

MIDDLE ATLANTIC STATES. 

New York. 

The State Board of Equalization, established in 1859, con- 
sisted of a number of the elective State officers (Lieutenant 
Governor, Secretary of State, Attorney-General, State Treasurer, 
State Engineer and Surveyor) with the Speaker of the Assembly. 
To these were added in 1896 the three Tax Commissioners, and 
since then the Board of Equalization has had only formal 
meetings to confirm the equalizations recommended by the Tax 
Commissioners. 

The Board of Tax Commissioners, established in 1896, con- 
sists of three members appointed by the Governor and Senate for 
a term of three years, at a salary of $5,000 each. They have 
power to investigate and examine methods of assessment within 



REPORT OF THE SPECIAL TAX COMMISSION. 337 

the State ; to furnish local assessors with information to aid them 
in their duties, and to make rules and regulations. They hear and 
decide on appeals by supervisors from the decisions of county 
boards of one in two years, to inquire into the methods of assess- 
ment and taxation. Since 1899 the tax commissioners also assess 
the value of the special franchises of public service corporations. 

New Jersey. 

The State Board of Assessors, established in 1881, consists 
of four members. It assesses the State franchise taxes on gross 
receipts and capital stock of corporations. 

The Board of Equalization of Taxes, established in 1905, took 
the place of the former State Board of Taxation, with larger 
powers. The new board "for the equalization, revision, review 
and enforcement of taxation" consists of five members appointed 
by the Governor and Senate, for a term of five years, the president 
receives an annual salary of $5,000, and the other members each 
$3,500 a year. This board is authorized to investigate complaints 
cl unequal valuation and the methods of local assessors, to re- 
view and correct the action of local assessors, and in certain cases 
it may direct the assessor to make a reassessment. 

Under this system of administrative supervision there has 
been a very marked increase in the assessed valuation of property. 

Pennsylvania. 

The Auditor General "makes settlements" (i. e., makes the 
assessments) for the following taxes : 

Tax on the capital stock of corporations, or interest in limited 
partnerships or joint associations. 

Tax on county, municipal, borough and corporate loans. 

Tax on gross receipts of transportation, transmission and 
electric light companies. 

Tax on the stock of banks. 

Tax on the gross premiums of domestic insurance companies 
with capital stock. 

Tax on the net earnings or income of brokers, private bankers 
and unincorporated banks and savings institutions. 

Tax on the matured shares of building and loan associations. 

Tax on the gross receipts of notaries public in Philadelphia 
County. 



338 REPORT OF THE SPECIAL TAX COMMISSION. 

The Board of Revenue Commissioners consists of the Auditor 
General, State Treasurer and Secretary of the Commonwealth. 
This board adjusts and equalizes the valuations of personal prop- 
erty between the several counties. 

Delaware. 

The State Treasurer, an officer elected for a term of two years, 
collects most of the specific taxes, including taxes on railroads, 
canals, telegraph, telephone and express companies, and licenses 
for the manufacture of liquor. 

Other State revenue is collected by the county clerks, register 
of wills, oyster revenue collector, Insurance Commissioner and 
the Secretary of State. 

. i 
SOUTHERN STATES. 
Maryland. 

The State Tax Commissioner, established 1878, is appointed 
by the Governor, Comptroller and Treasurer for a term of tour 
years. He supervises the county commissioners when acting as a 
board of control and review of local assessments, and has charge 
of the administration of various corporation taxes. 

Virginia. 

The State Corporation Commission, established by the con- 
stitution of 1902, assesses the property of railroads and canal com- 
panies and telegraph, telephone, express, steamboat, steamsnip 
and sleeping car properties. 

West Virginia. 

There is a Tax Commissioner, appointed by the Governor and 
Senate, for a term of six years, at a salary of $4,000. A State 
Board of Equalization is authorized by the Legislature at each 
decennial valuation of real estate. The Board of Public Works 
assesses the property of public service corporations. 

North Carolina. 

The Corporation Commission (three members elected for a 
term of six years) constitutes a board of appraisers and assessors 
for railroads, telegraph, telephone, street railway, canal and steam- 



REPORT OF THE SPECIAL TAX COMMISSION. 339 

boat companies, and other companies exercising the right of 
eminent domain. 

In 1907 there was created a State Board of Equalization con- 
sisting of seven State officers ex officio, to equalize the assessment 
of real estate. 

South Carolina. 

This State Board of Equalization is composed of members 
elected by the county boards of commissioners. It meets every 
fourth year for the equalization of the assessment of real property 
among the several counties, towns, cities and villages, and an- 
nually equalizes both real and personal property returns of textile 
industries, canals providing power for rent or hire, and cotton 
seed oil and fertilizer companies. 

The State Board of Assessors (composed of the Treasurer, 
Secretary of State, Comptroller, Attorney General and Chairman 
of the Board of Railroad Commissioners assesses railroad prop- 
erty, and also sleeping car and other car companies, and telegraph, 
telephone and express companies. 

Georgia. 

The Comptroller General assesses railroad property (including 
street railway, dummy and electric roads) and also express, tele- 
phone and telegraph companies. He also issues instructions to 
the local tax receivers. 

Florida. 

The Comptroller, assisted and advised by the Attorney-General 
and the State Treasurer, assesses railroad companies (including 
street railways) and also telegraph and telephone companies. 

Alabama. 

The State Tax Commission, established in 1907, consists of 
three members, appointed by the Governor, the chairman receiv- 
ing a salary of $3,000 a year, and the other members each $2,400. 
It has general supervision and control over the assessment and 
collection of taxes. 

The State Board of Assessors (composed of the Governor, 
Secretary of State, Auditor, Treasurer and Attorney-General) 
assesses railroad, telegraph and telephone companies. 



340 REPORT OF THE SPECIAL TAX COMMISSION. 

Mississippi. 

The Railroad Commissioners, elected for a term of four years, 
form a board of assessors for railroads, telegraph, telephone, ex- 
press, sleeping car and other car companies. 

There is no State Board of Equalization. 

A State Revenue Agent is elected at the general election, to 
act for the State in cases of unpaid taxes and to make additional 
assessments. 

Louisiana. 

The State Board of Appraisers consists of the Auditor and 
one member from each congressional district appointed by the 
Governor, Treasurer, Attorney-General and Secretary of State. It 
assesses railway, telegraph, telephone, sleeping car and express 
companies' property. 

The State Board of Equalization, established in 1906, consists 
of one member from each of the seven congressional districts. The 
first board met in January, 1907, and sent its secretary to visit 
the State of Illinois and examine the methods of the State Board 
or" Equalization in this State. In July the Louisiana board 
adopted rules similar to those of the Illinois board, providing for 
six committees, as follows : 

Equalization of Personal Property. 

Equalization of Agricultural Lands. j 

Equalization of Timber Lands. 

Equalization of Town and City Lots. 

Assessment of Capital Stock of Corporations. 

Assessment of Mineral, Mining and Oil Lands and Pipe Lines. 

Texas. 

There is a Board of Equalization for unorganized counties, com- 
posed of the Governor, Attorney-General and Secretary of State. 

In 1905 a State Tax Board was established, composed of the 
Comptroller of Public Accounts, the Secretary of State, and a 
Tax Commissioner appointed by the Governor. This board values 
the intangible assets of such corporations as railroads and express 
companies, and apportions these assessments to counties according 
to business (in some cases) or mileage (in others). 

Gross earnings taxes for the State are levied on express, tele- 



REPORT OF THE SPECIAL TAX COMMISSION. 341 

phone, telegraph and sleeping ckr companies, gas, water and 
lighting companies, stock exchanges, and other business. 

The State Tax Board has also power to examine books, records 
and witnesses, to secure compliance with the laws of assessment 
and taxation. 

Oklahoma. 

The State Board of Equalization consists of the Governor, 
State Treasurer, State Auditor, State Examiner and Inspector and 
Attorney-General. It acts as a board of assessors for railroads 
and other public service companies, such as street railways, natural 
gas, express, telegraph, Pullman, electric light, power, water and 
gas companies. 

The State Auditor issues instructions to local assessors. 

Arkansas. 

The State Board of Railroad Commissioners (composed of the 
Governor, Secretary of State and Auditor of State) assesses the 
property of railroads, sleeping and dining car companies, express 
companies and telegraph companies. 

The Arkansas Tax Commission, created in 1909, to continue 
until 1927, is composed of three members, appointed by the Gov- 
ernor and Senate. It meets as a State equalization board in No- 
vember of each year. 

Tennessee. 

The State Tax Assessors (commonly known as the Railroad 
Commission) consists of three freeholders appointed biennially by 
the Governor. It assesses railroad, telegraph and telephone 
companies. 

The Board of Equalization of Railroad Assessments is com- 
posed of the Governor, Treasurer and Secretary of State. 

The State Board of Equalization, composed of the Secretary 
of State, Treasurer and Comptroller, equalizes 'at (its biennial 
session the assessment of all properties except such as are equal- 
ized by the above board. 



342 REPORT OF THE SPECIAL TAX COMMISSION. 

NORTH CENTRAL STATES. 
Ohio. 

Before July 1, 1910, there were in Ohio several ex officio State 
boards of assessment, for assessing taxes on certain classes of 
corporations, and also three State boards of equalization. One of 
the latter was established in 1825, and consisted of as many mem- 
bers as the State Senate who were elected and met once in ten 
years to equalize the value of real property. 

By Act of May 24, 1910, these several boards of assessment 
and equalization were replaced on July 1, 1910, by a Tax Commis- 
sion of three members, appointed by the Governor, and confirmed 
by the Senate, not more than two commissioners to be of the 
same political party. Each commissioner receives an annual salary 
of five thousand dollars, is required to devote his entire time to 
the duties of the office, and shall not serve on or under any 
political party committee. 

This commission is given large powers of assessment and 
also some supervision over the local assessors. It will assess 
the value of the property of express, telegraph and telephone 
companies, and all other public utility companies; the capital 
stock of sleeping car, freight line and equipment companies, and 
the gross receipts from interstate business of railroads, street 
railways and other public utilities, and all of such corporations 
are required to submit detailed reports, and all other corporations 
are required to make certain reports. The valuations determined 
by the State Tax Commission are, in the case of property valua- 
tions, apportioned to the local districts as the basis of local taxa- 
tion; while State taxes are also levied on the basis of gross earn- 
ings and capital stock. The commission is authorized to appoint 
examiners and agents to conduct investigations. It is empowered 
to hear complaints and to increase or decrease the value of bank 
shares. It receives reports from the county auditors of the local 
valuation of real estate, and may increase or decrease the valua- 
tion of any county, city, village or taxing district, so as to place 
it at its true value in money. 



REPORT OF THE SPECIAL TAX COMMISSION. 343 

Indiana. 

The State Board of Tax Commissioners, established in 1891, con- 
sisted of the ex officio members of the former State Board of 
Equalization and two salaried members. In 1907 the constitution 
of the board was changed to three appointed members with the 
Secretary of State and Auditor of State. 

The Board of Tax Commissioners values the property of rail- 
road, street railroad, express, telephone, telegraph, sleeping car 
and transportation companies and pipe lines. It also exercises 
supervision over the local assessors and hears and decides appeals 
from the county boards of review, made by taxpayers or assessing 
officers. 

The board regularly holds three sessions each year. At the 
first, in April and May (in 1909, from April 5th to May 24th), the 
original valuations are placed on the property of railroads and 
other corporations assessed by the State Board. At the second 
session (in 1909, from July 6th to 17th), the board hears and acts 
on petitions from corporations asking for modifications of the 
valuations made at the first session. At the third session (in 
1909, from July 19th to August 2d) it takes up and considers ap- 
peals from the decisions of county boards of review. 

This board has also power to prescribe the forms of books and 
blanks used in the assessment and collection of taxes, to con- 
strue the tax and revenue laws of the State and give instructions 
to local officers when requested, to see that all assessments of 
property are made according to law, and to visit each county in 
the State once a year, to hear complaints, collect information 
and secure compliance with the law. Since 1894 the State Board 
has annually held a conference with the county assessors of the 
State. 

In 1890, before the State Board of Commissioners was estab- 
lished, the assessed valuation of property for taxation in Indiana 
was $553,937,774, in 1891 it was increased to $898,600,325, a gain of 
44 per cent, in one year, under the influence of the State Board. 
In 1904 the assessed value of real estate and improvements was 
$992,354,432, and of all property subject to ad valorem taxation 
$1,532,896,610, as compared with an assessed valuation of all prop- 
erty in Illinois of $1,087,844,331 for the same year. 



344 REPORT OF THE SPECIAL TAX COMMISSION. 

Michigan. 

The State Board of Equalization, established in 1851, consists 

of the Lieutenant Governor, Auditor General, Secretary of State, 

State Treasurer and Commissioner of the Land Office. It meets 

once in five years to equalize the assessed valuations as between 
counties. 

The State Board of Tax Commissioners was established in 1899, 
and now consists of three members, appointed by the Governor and 
Senate, for a term of six years, each receiving a salary of $2,500. 
This board assesses the value of the property of railroads, express 
and certain other corporations, and determines the average rate of 
taxation throughout the State, which is levied against the valua- 
tions of these corporations. The Board of Tax Commissioners 
has also supervision over the local assessing officers; each county 
must be visited by at least one member of the board once in each 
year, to hear complaints and collect information concerning 
assessments. 

The result of the system of State supervision in increasing 
assessments, especially of personal property is very marked. 

Wisconsin. 

A former State Board, consisting of the Secretary of State, State 
Treasurer and Attorney-General, met annually in May to "de- 
termine and assess the relative value of all property subject to 
taxation in each county." 

Following the report of the Special Tax Commission of 1898 
there was created in 1899 the offices of Commissioner of Taxation, 
and first and second Assistant Commissioners, with large powers 
of supervision over the system of assessment. Other acts have 
increased their powers, and in 1905 the organization was changed 
to a commission of three members, appointed by the Governor 
and Senate for terms of eight years, at a salary of $5,000 each. 

This commission has power to advise and direct local assess- 
ing officers, to visit counties and investigate the methods of local 
assessors, to review and decide appeals from county officers, and 
tc initiate proceedings against negligent or delinquent officials. It 
also values the property of railroad, street railways (and light, 
heat and power plants in connection therewith), telegraph, ex- 
press, sleeping car, freight line and equipment companies, 



REPORT OF THE SPECIAL TAX COMMISSION. 345 

The system of active State supervision over local assessments 
produced striking results. In three years the assessment valua- 
tion of property was more than double — from $648,035,848 in 1899, 
to $1,369,811,147 in 1902. Since 1902, however, the local assess- 
ments show some relative retrogression in comparison with the 
State Commission's valuation. 

Minnesota. 

The State Board of Equalization has consisted of the Gov- 
ernor, Auditor of State and Attorney-General, with additional 
members, one from each judicial district, appointed by the Gov- 
ernor for a term of two years. 

This board annually equalized valuations as between counties. 
"In order to test the valuations made below, the State Board 
adopted the use of an average for every class of property. * * * 
Where a county fell below the average established by the board 
the assessment was raised to the average percentage. With but 
little information concerning the accuracy of an assessment, 
classes of property were raised in different counties with the re- 
sult that the individuals who had turned in fair assessments were, 
over-assessed, as compared with people who had made a partial 
list of their property. Since such changes in the assessment 
ignored individual towns and at times even county lines, the dif- 
ferences in assessment between individuals and between towns 
were often increased rather than diminished by this method of 
dealing with the equalizing of the assessments."* 

In 1908 the annual session of the State Board of Equalization 
continued from September 8th to October 10th. Changes were 
made in the valuation of some classes of property for every county 
in the State, ranging from decreases of 40 per cent, to increases of 
120 per cent.f 

The Minnesota Tax Commission, created in 1907 consists of 
three members appointed by the Governor for a term of six years, 
each receiving a salary of $4,500. 

It is the duty of the Commission to confer with, advise and 
instruct local assessors in the work of assessment, and it may 
direct proceedings against such taxing officers as fail to perform 
their duty. The members of the Commission are required to visit 
at least one-half of the counties annually, to inquire into the 



346 REPORT OF THE SPECIAL TAX COMMISSION. 

methods of assessment and taxation and to ascertain whether 
the assessors faithfully discharge their duties. The power of 
equalizing town and county assessments is, under the Act of 1907, 
placed in the Tax Commission. The Commission has also power 
to order reassessments, to cause auditors to place omitted prop- 
erties on the assessment rolls, to receive complaints and to make 
examinations of property and to institute proceedings where im- 
proper and negligent administration of tax laws can be remedied. 
Witnesses may be summoned and required to give testimony and 
produce such books as may be necessary in securing knowledge of 
the value of properties. 

The law also requires the study and investigation of tax 
systems of other States and counties, enjoins the Commission to 
advise with the Governor upon the administration of the tax laws, 
and calls for the submission of the Commission's conclusions and 
findings to the Legislature as a basis for future legislation 5 

*Report Minnesota Tax Commission, 1908, pp. 6-7. 

tTable in Rept. Minn. Tax Comm'n, 1908, pp. 226-239. 

^Report Minnesota Tax Commission, 1908, pp. 13-14. 

j 

Iowa. 

The Executive Council, consisting of the Governor, Secretary, 
Auditor and Treasurer of State, constitutes a State Board of Re- 
view, which acts as a State Board of Equalization, for equalizing 
property valuations between counties, and as a Board of Assess- 
ment for assessing railway, express, sleeping and equipment car, 
telegraph and telephone properties. 

Missouri. 

The State Board of Equalization consists of the Governor, State 
Auditor, Treasurer, Secretary of State and Attorney General. It 
meets on the last Wednesday in February of each year to equalize 
real and personal property, and on the third Monday in April to 
assess, adjust and equalize the valuation of railroad property. 

Kansas. 

Before 1907 there was a State Board of Equalization, consist- 
ing of the Secretary of State, State Auditor and State Treasurer, 
and also a State Board of Railroad Assessors, consisting of the 



REPORT OF THE SPECIAL TAX COMMISSION. 347 

Auditor of State, Lieutenant Governor, Secretary of State, Attor- 
ney General and State Treasurer. 

By Act of 1907 (chapter 408), both of the former boards were 
abolished, and there was established a tax commission to take their 
place and with added powers. This commission consists of three 
members, appointed by the Governor and Senate, for terms of four 
years, who are to give their entire time to the duties of the office 
and to receive a salary of $2,500 per year. The tax commission 
has general supervision over the administration of the assessment 
and tax laws, and over the county assessors and other local of- 
ficers ; it provides a uniform method of keeping the tax rolls and 
books, shall visit each county from time to time, and at least once 
in two years shall require the county assessors to meet at the 
State Capitol, to discuss matters relating to taxation and proposed 
changes in the law. The State Commission is authorized to make 
investigations, with power to summon witnesses to appear and 
testify and to produce books and papers ; to direct proceedings to 
enforce the laws for the punishment of public officers and others 
for failure to comply with the tax laws or orders of the commis- 
sion, and to prescribe a uniform system of accounting for the 
municipalities of the State. The tax commission also constitutes 
a State Board of Equalization, with power to equalize between 
persons, cities, townships and counties and to hear appeals from 
the action of county boards of equalization. County assessors are 
appointed by the boards of county commissioners, and appoint 
deputy assessors. 

The tax commission also acts as a board of appraisers for as- 
sessing the property of railroads, car companies, telegraph, tele- 
phone and pipe line companies and determining the gross receipts 
of express companies. 

Nebraska. 

The State Board of Equalization, consisting of the Governor, 
Auditor of Public Accounts, Treasurer, Secretary of State and 
Commissioner of Public Lands and Buildings, also assesses the 
property of railroads and allied corporations. 

South Dakota. ' 

The State Board of Equalization consists of the Governor, 

Auditor, Secretary of State, Treasurer and Commissioner of School 



348 REPORT OF THE SPECIAL TAX COMMISSION. 

and Public Lands. It assesses the property of railroads, telegraph, 
telephone, express and sleeping car companies. 

North Dakota. 

The State Board of Equalization is composed of the Governor, 
Auditor, Treasurer, Attorney General and Commissioner of Agri- 
culture and Labor. It assesses the franchise, track and rolling 
stock of railroads, and also express, telephone, freight line and 
equipment, and sleeping and dining car companies. 

WESTERN STATES. 

Montana. 

The State Board of Equalization consists of the Governor, Sec- 
retary of State, Treasurer, Auditor and Attorney General. It as- 
sesses the franchise, track and rolling stock of railroads. 

Idaho. 

The State Board of Equalization consists of the Governor, Sec- 
retary of State, Attorney General, State Auditor and State Treas- 
urer. It assesses railroad track and rolling stock, telegraph and 

telephone lines and the franchises of such companies. 

j 
Wyoming. 

The State Board of Equalization consists of the Secretary of 
State, Treasurer and Auditor. It assesses railroads, express com- 
panies, telegraph and telephone lines and car companies of all 
sorts. In 1903 its powers were increased. In 1909 the office of 
tax commissioner was established, to be appointed by the Gov- 
ernor and Senate for a term of two years, and to supervise the 
administration of all tax laws. 

Colorado. 

The State Board of Equalization consists of the Governor, State 
Auditor, State Treasurer, Secretary of State and Attorney Gen- 
eral. This board assesses the property of railway, telegraph, tele- 
phone and sleeping and palace car companies, and adjusts irregu- 
larities in the local assessments between counties. By laws of 1901 
and 1902 provision is made for an annual meeting of the county 
assessors at the State Capitol to compare and correct assessments. 



REPORT OF THE SPECIAL TAX COMMISSION. 349 

New Mexico. 

The State Board of Equalization consisted in 1902 of one 
taxpayer from each of the five judicial districts, appointed by the 
Governor. It assesses the property of railway, telegraph, tele- 
phone and sleeping car companies, and hears appeals from the 
county boards of equalization or from any city assessor or city 
council. 

Arizona. 

The State Board of Equalization consists of the Auditor 
and one member from each of the five judicial districts, appointed 
by the Governor and Legislative Council for a term of two years. 
It equalizes the assessment between counties and acts as a board 
of assessment for railroad property. 

Utah. 

The State Board of Equalization consists of four members, ap- 
pointed by the Governor and Senate for a term of four years. It 
equalizes the valuation between the several counties and assesses 
the property and franchises of railroad, street railway, car, depot, 
telegraph and telephone companies. 

Nevada. 

Under the law in 1902 the county assessors met at the State 
Capitol to establish a uniform valuation of property. By act of 
1903 there has been established a board of revenue, consisting of 
county assessors, with certain State officers ex-officio. The county 
assessors, meeting as a State Board of Assessors, determine the 
valuation of railroads and some other classes of property. 

J 
California. 

The State Board of Equalization is composed of the State 
Comptroller and one member elected by each congressional district, 
for a term of four years, at an annual salary of $4,000 each. It 

equalizes the total assessment rolls of counties and enforces all 
State taxes. 

Oregon. 

By act of 1909 there was established a Board of Tax Commis- 
sioners, consisting of three ex-ofrlcio members (Governor, Secre- 



350 REPORT OF THE SPECIAL TAX COMMISSION. 

tary of State and State Treasurer) anl two others to be appointed 
by the ex-officio members for a term of four years, at a salary of 
$2,500 each. This board has general supervision of the assessment 
and collection of public revenues and assesses the property of 
public service corporations. 

Washington. 

The State Board of Equalization consists of the Secretary of 
State, Commissioner of Public Lands and Auditor and (since 
1905) the members of the Tax Commission. 

The Tax Commission, established in 1905, consists of three 
members, appointed by the Governor and Senate for a term of four 
years, at a salary of $3,000 a year each. The board was given 
large powers of investigation and supervision of the system of 
taxation, and on recommendations made in its first report, im- 
portant changes were made in the tax laws in 1907. The assess- 
ment of railroad property was placed in the hands of the Tax Com- 
mission, excise taxes were laid on express companies, private car 
companies and insurance companies, and the incorporation and 
license fees of corporations were increased. 

TABLE SHOWING THE COST OF STATE TAX COMMISSIONS 
SO FAR AS ASCERTAINABLE. 

Salaries, 
Members Only. 
Alabama $10,200 

Connecticut — . 3,000 

Indiana 9.000 

Kansas 7,500 

Massachusetts 5,000 

Michigan 

♦Minnesota 13,500 

North Carolina 

Ohio 15,000 

Oregon 

Texas 

Vermont 

Washington 9,000 

West Virginia 

Wisconsin 15,000 

♦Provided for by appropriation. 



Other 






Expenses. 


Total. 


Year. 


$13,539.25 


$23,739.25 


1912 


4,242.55 


7,242.55 


1912 


8,109.04 


17,109.04 


1912 


12,400.00 


*19,900.00 


1914-15 


165,044.76 


170,044.70 


1912 




63,801.03 


1912 


23,107.48 


36,607.48 


1912 




23,078.69 


1912 


45,455.55 


60,455.55 


1912 




*22,000.00 


1912 




*4,500.00 


1915 




11,207.50 


1912 


11,300.00 


20,300.00 


1911 




*25,000.00 


1914 


9,750.72 


11,509.72 


1912 



INDEX. 



LETTER OF TRANSMITTAL 

INTRODUCTION. 

Page 

The resolution creating - the Commission 5 

Appointment of the Commissioners 5 

Organization and meetings 5 

The appointment of expert 6 

The work of the expert 6 

The Constitutional amendment 6 

The preliminary report of the Commission 7 

The final report 7 

THE RECOMMENDATIONS 9 

FART I 

GENERAL DESCRIPTION OF THE FRESENT TAX SYSTEM 13 

CHAPTER I. THE GENERAL FROFERTY TAX 15 

Taxable estates 15 

Assessment by County Assessors 15 

Taxpayers "Statements" and Oaths 16 

The elaborate schedule 16 

Preparing the assessment book 17 

The County Board of Supervisors 17 

The State Board of Equalization 17 

The transcript of transfers 18 

Equalization between counties 18 

State assessments 18 

Franchises 18 

Character of state assessments 19 

Sheriff collects taxes 19 

The assessment roll no longer a warrant 19 

Collection of delinquent taxes 20 

"Omitted property" , 20 

Revenue agents 20 

CHAPTER II. OTHER REVENUES 22 

I STATE REVENUES 22 

Difficulty of compiling data 22 

The revenue and expenditure account 22 

Continuing appropriations 23 

Aggregate state revenues 23 

A. COMMONWEALTH RECEIPTS FROM TAXES FROPER 23 

1. The general property tax 23 

2. License taxes 23 

3. Inheritance taxes 24 

4. Tax on foreign insurance companies 24 

B STATE FEES 24 

1. Secretary of State 24 

2. Insurance department 24 

3. Tax on organization of corporations 24 

4. Jeff ers on County fees 24 

C. EARNINGS STATE FUNDS, AND SALES 24 

D INSTITUTIONAL EARNINGS, OR REFUNDS AND KINDRED ITEMS 25 

E FINES AND FORFEITURES 25 

Summary of net revenues, 1911 25 

F BOOKKEEPING ENTRIES. TRANSFERS AND REFUNDS 25 

G UNCLASSIFIED 26 

Rough estimate for 1912, or 1913 26 

Analysis of the receipts 26 

CHAPTER IH. LOCAL REVENUES 27 

Di f f iculty of obtaining data 27 

Census returns of 1902 27 

One third each to State, counties and cities 28 

Reports obtained from county officers 28 

Intricacy of the problem 28 

Analysis of the local tax returns 29 

The ratio of taxes to true value „. 29 



INDEX— Continued. 

PART II. Page 

THE DEFECTS OP THE KENTUCKY TAX SYSTEM AND THE 

REMEDIES THEREFOR 31 

CHAPTER I. THE TWO MAIN DEFECTS 33 

All property is not taxed 33 

Discrepancies in acreage returns 33 

Comparison of acreage assessed in "tracts" with census of returns 

of "farms" 34 

This estimate ultra-conservative 34 

The complete tables 34 

Weakness of the tax law 35 

Over-dependence on taxpayers' statements 35 

The handicaps imposed on the Assessor 35 

The Assessor not eligible for re-election 35 

Assessor works without supervision 36 

Assessor works without tools 36 

Assessor has no tax maps 36 

Assessment analogus to an inventory 37 

Assessor subject to bad political influences 37 

Assessment districts too small 38 

The Assessor's work should be of a professional character 38 

The system, not the Assessors to blame 39 

The city assessor in Louisville 39 

The handicaps on the boards of supervisors 39 

Lack of uniformity 39 

The extent of the inequalities 40 

Farm lands assessed at fifty-two per cent of true value 40 

The significance of the inequalities 41 

Inequalities affect the apportionment of the State tax 41 

Illustration of the effect of inequalities 41 

Equalization does not equalize 42 

The correct method of equalization 42 

The true consideration to be named in deeds 42 

The two counts: Omitted property and inequalities 42 

Minor faults 43 

The sources of the evils 43 

Prevention better than cure 43 

Make the roll right to begin with 43 

Land and improvements should be separately assessed 43 

A property tax should be levied on property, not on persons 44 

Kentucky attempts to tax persons, not property 44 

Double taxation 45 

Undervaluation 45 

Property versus personal taxes 45 

Illustration of the difference 46 

CHAPTER II. REMEDIES FOR THE TWO MAIN DEFECTS IN THE 

PRESENT TAX SYSTEM 47 

The defects restated 47 

The remedies demanded are equally clear 47 

The constitutional provision 47 

Our recommendations 48 

Expense of new system 48 

Assessors just elected to serve out their term 49 

I. THE STATE TAX COMMISSION 49 

The experience of other states , 49 

Successful boards 50 

Such commissions elsewhere 50 

Our proposal 51 

The duties of the Commission 51 

II. THE ASSESSMENT DISTRICTS 51 

Small assessment districts bad 51 

Advantages of large districts 51 

Fifteen districts proposed 52 

Principles guiding in making the districts 52 

The proposed districts 53 

III. THE DISTRICT TAX COMMISSIONER 53 

Proposed method of appointment 53 

The plan not untried 54 

The Assessor's office not a political office 54 

Features to be preserved in any event 54 

Compensation allowed 54 

Salaries of district Tax Commissioners 55 

Compensation of district Tax Commissioners during the ad interim 

period 55 



INDEX— Continued. 

ARTICLE II— Continued- 
Page 

Sec. 3. Temporary provisions for the appointment of Deputy Tax 

Commissioners 132 

(1) County Assessors to be appointed Dejputy Tax Commissioners. 
Penalty for failure to qualify. Oath. Bond. Work to beg-in when. 
Vacancies, how filled. (2) Temporary District Tax Commission- 
ers. (3) Compensation of Deputy Tax Commissioners. Deputy 
Tax Commissioner's claim to be verified — Penalty. Deduction for 
failure to do duty. Payment of Deputy Tax Commissioner. Com- 
pensation of District Tax Commissioners. 

Sec. 4. District Tax Commissioners 137 

Sec. 5. Examination of candidates for the office of District Tax 

Commissioner 138 

Sec. 6. Temporary appointments 138 

Sec. 7. Term of office of District Tax Commissioners 139 

Sec. 8. Skill to be considered in appointments 139 

Sec. 9. Deputy District Tax Commissioners 139 

Sec. 10. Funds of the support of District Tax Commissioner's office. 

Advance ;to be allowed 139 

Sec. 11. Oath of office and failure to take office 141 

Sec. 12. Bond of District Tax Commissioners 141 

Sec. 13. Entire time to be devoted to office 141 

Sec. 14. Office rooms 142 

ARTICLE III. ASSESSMENT OP PROPERTY 142 

Subdivision I. General provisions 142 

Sec. 1. Property to be assessed in counties 142 

Sec. 2. Assessments to be at full cash value 143 

Sec. 3. Land and improvements to be separately assessed 143 

Sec. 4. Date of assessment 143 

Sec. 5. Annual assessment roll 143 

Sec. 6. Fiscal court to provide tax maps 143 

Up-keep of tax maps 144 

Sec. 7. Use of tax map. Liability of District Tax Commissioner 144 

Sec. 8. Description of lands 144 

Sec. 9. Real estate assessed to owner if known 144 

Sec. 10. County Clerk to certify conveyances, etc 145 

Sec. 11. Taxpayer's statement = 146 

Lands and improvements to be separately valued 146 

Sec. 12. Penalty for refusal to file statement 147 

Sec. 13. Penalty for fraud 148 

Sec. 14. Double taxation of property not assessed the year before 148 

Sec. 15. Roll books to be provided 148 

Sec. 16. Itemized list 148 

Sec. 17. Taxpayer's oath .-. 149 

Sec. 18. Deputy Tax Commissioner may examine under oath 149 

Sec. 19. District Tax Commissioner to fix value 149 

Sec. 20. Preparation of the assessment books 150 

Sec. 21. Illegal entries in assessment books 151 

Sec. 22. District Tax Commissioner's oath 152 

Sec. 23. Books to be delivered to County Clerk 152 

Sec. 24. District Tax Commissioner's report to Commission 152 

Sec. 25. Penalty : 153 

Sec. 26. Names of purchasers — How entered 153 

Sec. 27. Property in two counties 153 

Sec. 28. Property discovered to be in other counties 153 

Sec. "29. Assessment roll the warrant for the collection of taxes 153 

Sec. 30. Copies for cities 154 

Subdivision II. Quadrennial revaluation of real estate 154 

Duties of State Tax Commission and of Deputy Tax Com- 
missioners 154 

Sec. 1. Real estate revalued only once in four years 154 

Sec. 2. Rules and standard values, agricultural lands. Rules and 
basing values city lands. 

Rules and standard values improvements 155 

Sec. 3. District Tax Commissioners to search out values 155 

Sec. 4. District Tax Commissioners to keep records of values 156 

Sec. 5. District Tax Commissioners to fix values 156 

Subdivision III. Assessments by the State Tax Commission 156 

Sec. 1. Property assessed by State Tax Commission 156 

Sec. 2. Reports to State Tax Commission 157 

(1) Reports on franchises. Interstate companies. Railroad 
and other companies to report additional items. Net and 
gross receipts 158 

(2) Railroads to report on physical property 160 

Statement to be filed but once. (3) Other public utilities to 

report tangible property . 161 



INDEX— Continued. 

ARTICLE III— Continued— Page 

(4) Local officials to report boundaries of districts. (5) Banks 
to report what. (6) Railroad bridge companies to report. (7) 

Turnpike companies to report. (8) Reports on spirits.. 162 

Sec. 3. Verification 163 

Sec. 4. Assessment how made in case of failure to report 164 

Penalty for failure to report. Companies' penalties. Officers' 

penalties 164 

Sec. 5. How franchises are to be assessed. Determination of capital 
stock. Interstate business of non-utility companies. Inter- 
state public utilities. Kentucky companies operating- outside 

the State. Franchises — How measured 165-167 

Sec. 6. Commission to assess physical property 167 

Sec. 7. Assessment of bank shares 167 

Sec. 3. The State assessment roll 168 

Sec. 9. Assessments apportioned to counties , 169 

Sec. 10. Notice of time for hearings 169 

ARTICLE IV. REVIEW AND EQUALIZATION 170 

Sec. 1. Appointment of Boards of Supervisors 170 

Sec. 2. Boards of Supervisors for review of personal property 170 

Sec. 3. Sheriff to serve appointments 171 

Sec. 4. Oath supervisors shall take 171 

Sec. 5. Penalty for failure to attend sessions 171 

Sec. 6. Meeting- of Supervisors, and duties 171 

Sec. 7. Supervisors' powers 172 

Sec. 8. Review of personal property 173 

Sec. 9. Sessions of supervisors 173 

Sec. 10. County Clerk to notify of changes 173 

Sec. 11. Appeal from decision of Supervisors 174 

Sec. 12. Certificate of Supervisors 174 

Sec. 13. Compensation of Supervisors 174 

Sec. 14. Irregularities not to invalidate 175 

Sec. 15. Tax Commission may sit with Supervisors 175 

Sec. 16. Books and records returned to Clerk 175 

Sec. 17. Supervisors not to raise State assessments 175 

Subdivision II. The State Tax Commission to act as State Board of 

Equalization 175 

Sec. 1. State Board of Equalization— How constituted 175 

Sec. 2. Meetings 175 

Sec. 3. To examine assessments 176 

Sec. 4. Percentage to be added or subtracted 176 

Sec. .5. Percentages on real estate 176 

Sec. 6. Notifications to counties of changes 176 

Sec. 7. When no equalization is deemed necessary 176 

Sec. 8. Certificate of changes to county 177 

Sec. 9. Certifications to Auditors 177 

ARTICLE V DUTIES OP THE COUNTY CLERKS IN RELATION TO THE 

REVENUES 178 

Sec. 1. County Clerk to check the roll 178 

Sec. 2. County Clerk's preliminary report to State 179 

Sec. 3. County Clerk to complete the roll 179 

Sec. 4. County Clerk to extend the taxes 179 

Sec. 5. County Clerk's oath 180 

Sec. 6. County Clerk to charge the Sheriff with taxes, and hand final 

report to Auditor 180 

Sec. 7. Change of Sheriffs 180 

ARTICLE VI. COLLECTION OP TAXES 181 

Subdivision I. Collection by Sheriff. Bond and duties 181 

Sec. 1. Sheriff to collect 181 

Sec. 2. Sheriff bond and quietus. Qualifications of sureties.. 181 

Sec. 3. Failure to execute bond forfeits office. Appointment of sheriff 

or collector :. 182 

Sec. 4. Sheriff or collector who forfeits office. Not to be appointed to 

certain offices 182 

Sec. 5. Sheriff5s revenue bond 182 

Sec. 6. County Court may require additional bond 182 

Sec. 7. Outgoing Sheriff to deliver office and settle. Penalty 183 

Sec. 8. Death of Sheriff. Sureties may nominate collector 183 

Sec. 9. Office at court house. Books kept by balances 183 

Sec. 10. Sheriff's books open to inspection 184 

Sec. 11. Bookkeeping— Form of — Auditor to adopt 184 

Sec. 12. Office to be kept open — Taxes, dues, retained out of claims. 

Witness fees 184 

Sec. 13. Deputy Sheriffs. Appointment bond 185 



INDEX— Continued. 

Page 

IV. TAX MAPS 55 

The value of tax maps 55 

Tax maps in existence 56 

Expense of tax maps; how borne 56 

Maximum one dollar per hundred acres 56 

Difficulties to be overcome 56 

V. RULES OP ASSESSMENT AND STANDARD VALUES 57 

Uniform rules versus guess work 57 

Uniform rules in cities 57 

Illustrated by New York City system 57 

Application of these ideas to Kentucky 61 

Extension of sucn rules to country property. Personal property 61 

Same as to lands in the country 62 

The gain in fixing standard values 62 

Farm buildings H J 62 

Use of standard values permissive, not obligatory 62 

Example of the use of standard values 63 

Approximate uniformity the aim 63 

No abuses can arise 63 

VI. SEPARATE ASSESSMENT OP LAND AND THE IMPROVEMENTS 

THEREON 64 

Land and improvements 64 

Advantages of separate assessment , 64 

VII. THE QUADRENNIAL ASSESSMENT OP REAL ESTATE 64 

Real estate to be revalued once in four years only 64 

The purposes 65 

The saving 65 

The plan in Ohio 65 

The reasons for Ohio's change of heart 66 

How our proposal differs 66 

CHAPTER III. LIMITING THE TAX RATES 67 

Raising assessments should not raise taxes 67 

THE ONE PER CENT TAX LIMIT ACT 67 

Tax limit law to take effect 1916 69 

CHAPTER IV. THE TAXATION OP MONEY AND CREDITS 70 

The present constitutional provision 70 

Provision a dead letter 70 

Why money is concealed 70 

Mortgages can be found 71 

Capital shy of Kentucky 71 

The law discriminates 71 

No leniency to the money lender proposed 71 

"The Proposed Amendment" 72 

Exemption of public bonds 72 

The Massachusetts Commission of 1908 73 

The law requires all property to be assessed 73 

In practical operation works injustice 73 

Abandoned in England more than a century ago 74 

Retained in very few European countries 75 

Found in few ultra-democratic countries 75 

A dismal failure as applied to money and credit 76 

The general property tax becomes a tax on real estate 76 

Census statistics 76 

Burden always falls upon tangible property" 77 

Taxes on money and credit paid by the helpless, not by the rich 77 

Places a premium on dishonesty 78 

Drastic laws to secure disclosures have always failed 79 

Stringent law ineffective 79 

The limit of drastic laws reached 80 

Experience of other states similar 82 

THE TAXATION OP MONEYS CREDITS AND SECURITIES IN 

KENTUCKY 83 

Tax commission's view of the situation 84 

Two opposing theories of solution 84 

1. Exemption of all intangible property 85 

2. Strict enforcement of existing law 85 

Solution of the problem 87 

This plan not untried 87 



INDEX— Continued. 

Page 

THE FIRST TYPE OP SECURITY TAX 88 

Connecticut , 88 

New York 88 

THE SECOND TYPE OP SECURITIES TAX 89 

Pennsylvania 89 

SUCCESSFUL TAXATION OP INTANGIBLE PROPERTY IN MARYLAND. ... 92 

Minnesota 95 

Iowa 97 

CONCLUSIONS OP THE COMMISSION 97 

CHAPTER V. MINOR DEFECTS IN THE TAX LAWS WITH PRO- 
POSED REMEDIES 98 

The taxpayer's statement 98 

Simplified assessment books 98 

The assessment roll should be the warrant for the collection of taxes.... 98 

COLLECTION OF DELINQUENT TAXES 99 

CHAPTER VI. OTHER PROPOSED REMEDIES NOT RECOMMENDED 103 

A. An income tax 103 

B. Separation of state irom -local taxation 103 

FART III 

THE BILLS IN DETAIL 105 

CHAPTER I. THE GENERAL REVENUE LAW 107 

AN ACT RELATING TO REVENUE AND TAXATION 120 

ARTICLE I. PROPERTY SUBJECT TO TAXATION AND GENERAL 

PROVISIONS 120 

Sec. 1. State tax levy 120 

Sec. 2. Property subject to taxation 120 

Sec. 3. Lien on property for taxes due State, county, town 120 

Sec. 4. Definitions 121 

Property. Real estate. Improvements. Personal property. Situs 
of land. Situs of tangible personal property, a. Goods, wares 
and merchandise, b. Machinery, c. Horses, cattle, etc. d. Other 
tangible personal property. Situs of intangible personal prop- 
erty. Property within the jurisdiction of State. Value. 
Sec. 5. Respective duties of holders of equitable and legal title — 

Fiduciaries 122 

Sec. 6. Property exempt from taxation 123 

Sec. 7. Shares in certain corporations not to be listed 123 

ARTICLE II. THE STATE TAX COMMISSION. 

Subdivision I. Membership and organization of the State Tax Commission 124 

Sec. 1. State Tax Commission membership 124 

Sec. 2. Appointment and term 124 

Sec. 3. Removal 124 

Sec. 4. Entire time to service. Corrupt practices 125 

Sec. 5. Salary , 125 

Sec. 6. Officers and employees 125 

Sec. 7. Quorum 126 

Sec. 8 Seal 126 

Sec. 9. Office rooms, etc 126 

Sec. 10. Sessions 126 

Subdivision II. Powers and Duties of the Commission 126 

Sec. 1. General duties : 126 

Sec. 2. State Assessments 127 

Sec. 3. Special duties 127 

(1) Rules (2) Oaths. (3) Forms. (4) Witnesses. (5) Examination of 
books. (6) Supervision of assessors. Assessments for municipal 
purposes. (7) Conferences. (8) Prosecutions. (9) Commonwealth 
attorneys to assist. (10) Reports to be collected. (11) Reassess- 
ment. (12) Visit counties. (15) Violation of tax law. (16) Confer 
with Governor. (17) Report of Commission. 

Sec. 4. Information confidential 130 

Subdivision III. Assessment Districts and Local Deputy Tax Commis- 
sioners 131 

Sec. 1. Assessment districts 131 

Sec. 2. Powers of County Assessor transferred to the State Tax 

Commissioner 132 



APPENDIX 



Tables Relating to State and County Taxation by Counties. 



TOTAL ASSESSMENTS, STATE AND COUNTY TAX BATES, RATIO OF 
ASSESSED TO TRUE VALUE OF FARM LANDS AND RATIO OF TAXES 



Number 1. 
Number 2. 

Number 3. 

Number 4. 
Number 5. 

Number 6. 

Number 7. 

Number 8. 

Number 9. 

Number 10. 
Number 11. 

Number 12. 
Number 13. 
Number 14. 
Number 15. 

Number 16. 



TO TR UE VALUE. 



Page 



Tables relating- to State and county taxation by counties. — Total 

assessments, State and County tax rates, ratio of assessed to 

true value of farm lands and the ratio of taxes to true values.... 209 

Table showing the distribution of the assessed valuation, State 

board and local, of public service companies, by counties, 1912 

assessment 251 

Estimate of District Assessors' allowance based on assessment 

of 1911. Computed as provided in the proposed bill 254 

An Act providing a tax on securities 259 

The Use of Standards in Real Estate Assessment, by A. C Pley- 

dell, Secretary, New York Tax Reform Association 264 

Tax Maps, by Edward L. Heydecker, Assistant Tax Commis- 
sioner, City of New York 273 

Preparation of a Town Map f<~>~ the Town of New Castle, West- 
chester County, by Sidney J. Smith Chairman of the Board of 

Assessors, New Castle 281 

Statute of Minnesota, establishing a State Tax Commission 288 

Mortgage Registry Tax Law 297 

Laws of Minnesota, 1911, relating to the assessment and taxa-. 

tion of money and credits 301 

Law creating Wisconsin State Commission 310 

The New York tax on mortgages 317 

Report of National Tax Association 325 

Chose in Action Tax, Connecticut 329 

New York Tax on Secured Debts 331 

An outline of the State Tax Commissions and similar boards in 

different states 334 

Permanent State Tax Commissions 334 



INDEX— Continued. 

ARTICLE VI— Continued- 
Page 

Sec. 14. Justices' districts visited to receive taxes. Notice 185 

Sec. 15. Taxes when due. Reports and payments to Auditor. Penalty.... 185 

Sec. 16. Sheriff not to be interested in public works nor buy claims. 

Penalty 186 

Sec. 17. Misapplication of funds collected. Penalty 186 

Sec. 18. Sheriff's settlements— Exceptions to. Appeal from judgment on.. 186 

Sec. 19. Reports to county of taxes collected 187 

Sec. 20. Taxes when due. Interest and penalty 187 

Sec. 21. Sheriff to record payments in assessment roll -....187 

Sec. 22. Tax receipt 187 

Sec. 23. Form of tax receipt 187 

Sec. 24. Payment of taxes on single parcels of real estate. Joint owner 

paying tax has lien. Court authorized to apportion assessment 188 

Sec. 25. Assessment roll sole warrant for collection of taxes 189 

Sec. 26. Sheriff's commissions 190 

Sec. 27. Tax to operate as judgment 190 

Sec. 28. Tax on personal property a lien on real estate 191 

Sec. 29. Tax collected from persons removing or concealing propervy.... 191 

Sec. 30. Secured taxes not to be collected by summary process 191 

Subdivision II. Collection of taxes by attachment 192 

Sec. 1. Collection of taxes. Sheriff to give notice 192 

Sec. 2. Effect of notice. Trial judgment. Sale of property 193 

Sec. 3. Delinquent not released until tax paid 193 

Sec. 4. Notice may include all persons indebted 193 

Sec. 5. Docket— How made out — Parties 193 

Sec. 6. Judgment — Defenses 193 

Subdivision III. Collection of taxes assessed on the State Assessment 

Roll 194 

Sec. 1. Certain taxes to be paid to State Treasurer 194 

Sec. 2. Notice to State taxpayers 194 

Sec. 3. State Treasurer to receipt for taxes 194 

Sec. 4. State taxes due when 194 

Sec. 5. Injunction not to issue against State 194 

Sec. 6. Companies may sue to recover — How, when 194 

ARTICLE VII. COLLECTION OP DELINQUENT TAXES 195 

Subdivision I. Delinquent taxes. General procedure 195 

Sec. 1. Publication of delinquent tax list 195 

Sec. 2. Notice of sale 196 

Sec. 3. Publication where 196 

Sec. 4. Time and place of sale 196 

Sec. 5. Copy of delinquent list sent to Auditor and Commission 196 

Sec. 6. Procedure of the sale 196 

Redemption before sale 197 

Sec. 7. Notice to Auditor and Commission...! 197 

Sec. 8. Investigation of cause of delinquency and state of property 197 

Sec. 9. Five years for redemption. Additional penalties. Division 

of money recovered 198 

Sec. 10. Property to be assessed each year ! 198 

Sec. 11. Deed to the Commonwealth 199 

Sec. 12. No injunction to issue against collection of tax. Suit when 200 

Sec. 13. Commission to have custody 201 

Sec. 14. Sale of property deeded to the Commonwealth 201 

Sec. 15. Sale by auction 202 

Sec. 16. Division of the proceeds 202 

Sec. 17. Fiscal court may move to recover taxes 203 

Sec. 18. Taxes over $300 to be recovered by action 203 

Subdivision II. Collection of delinquent taxes' on the State Assessment 

Roll 204 

Sec. 1. Taxes when delinquent 204 

Sec. 2. Proclamation of delinquency ., 204 

Sec. 3. Attorney' General to file suits 205 

Receivers may be appointed 205 

ARTICLE VIII. BONDS OP OFFICERS PENALTIES THEREUNDER 205 

Sec. 1. Bonds of officers. Bind to what 205 

Sec. 2. Penalty— How enforced 286 

Sec. 3. Penalty when not prescribed 206 

Sec. 4. Officer not to retain fee 206 

Sec. 5. Penalties for failure of duty by Deputy Tax Commissioner 206 

Sec. 6. Remedy for non-performance of duty by officer 206 

Sec. 7. Clerk failing to pay redemption money. Penalty 206 

Sec. 8. Selling twice. Penalty 206 

Sec. 9. County Attorney to prosecute 206 



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N. MANCHESTER, 
INDIANA 46962 



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